Location: Lauderdale County, TN | Metro: Haywood County, TN
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $760 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,300 |
| 4 Bedrooms | $1,530 |
| 5 Bedrooms | $1,775 |
| 6 Bedrooms | $1,988 |
| 7 Bedrooms | $2,147 |
| 8 Bedrooms | $2,254 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,000 | $107,872 | 0.93% | C |
| 3BR | $1,300 | $178,423 | 0.73% | D |
| 4BR | $1,530 | $240,048 | 0.64% | D |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP 38063, located in Ripley, TN, might raise several concerns regarding the feasibility of investing in properties under Section 8. Let's address these concerns with the available data.
Objection 1: Will Fair Market Rent (FMR) of $930 cover the mortgage on a $138,718 home?
The FMR of $930 per month is indeed a key figure for determining rental income under Section 8. To evaluate if it can cover the mortgage, we need to consider the typical mortgage payments for a property valued at $138,718. Assuming a 30-year fixed-rate mortgage at an average interest rate of around 4%, and a 20% down payment, the monthly principal and interest payment would be approximately $575. This means that the FMR of $930 would comfortably cover the mortgage payment, leaving a surplus of $355 per month. However, this calculation does not account for additional costs such as property taxes, insurance, and maintenance, which must also be factored into the total expenses.
Objection 2: Is there enough renter demand at 36.1%?
The 36.1% rental occupancy rate suggests that there is a moderate level of demand for rental properties in ZIP 38063. While this percentage is not exceptionally high, it indicates that there is a stable tenant pool. For a landlord or small-portfolio investor, this rate ensures that the property will likely remain occupied, providing steady income. It's important to note that the rental demand can fluctuate based on economic conditions and local employment trends, but the current data supports the viability of rental properties in this area.
Objection 3: Will vouchers keep pace with $782 market rents?
The current market rent of $782 is lower than the FMR of $930, indicating that vouchers could potentially cover the majority of the rent. However, the question remains whether voucher amounts will adjust to match rising market rents. According to HUD guidelines, voucher amounts are adjusted periodically to reflect changes in the housing market. In ZIP 38063, the gap between the FMR and market rent suggests that landlords should be able to secure tenants through Section 8 without significant financial strain. Yet, long-term projections require monitoring to ensure that voucher increases align with any rise in market rents.
In conclusion, while the data provides insight into the immediate financial viability of Section 8 investments in ZIP 38063, ongoing attention to economic indicators and policy adjustments is necessary for sustained success.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). Demographics from U.S. Census (2024).
About FMR: Fair Market Rent (FMR) is used to determine payment standards for the Section 8 Housing Choice Voucher program, initial renewal rents for some expiring project-based Section 8 contracts, and rent ceilings for HOME Investment Partnerships.