Location: Memphis, TN | Metro: Memphis, TN-MS-AR HUD Metro FMR Area
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 | $940 |
| 1 Bedroom | $1,020 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,120 | $80,739 | 1.39% | A |
| 3BR | $1,480 | $120,905 | 1.22% | A |
| 4BR | $1,700 | $142,303 | 1.19% | B |
| 5BR | $1,972 | $169,112 | 1.17% | B |
U.S. Census Bureau data (2024)
To integrate ZIP 38107 into a Section 8 portfolio strategy, consider it primarily as an appreciation play. This classification is based on the area's low price-cut share and the fact that the days on market (DOM) data is not applicable, indicating a robust demand for rental properties without the need for significant price adjustments.
The Federal Market Rent (FMR) for ZIP 38107 in fiscal year 2024 is set at $1110, which is below the market average of $1,236 for a typical rental unit. This discrepancy suggests that landlords can potentially charge slightly above the FMR rate, capturing additional revenue while still remaining competitive within the local rental market.
The median home value in ZIP 38107 is $106,778, making it an affordable area for investment. However, the key factor that supports the appreciation play classification is the 0.2% price-cut share. This indicates that properties in this area are rarely discounted, suggesting strong buyer interest and stable property values.
The median income in ZIP 38107 is $35,265, and the renter share stands at 62.1%. These figures suggest a substantial portion of the population relies on rental housing, with many likely qualifying for Section 8 assistance. The high renter share also means that there is a consistent demand for rental units, reducing the risk of vacancy and ensuring steady cash flow.
While the spread between the FMR and market rates might seem small, it is important to note that the FMR is designed to be a benchmark rather than a ceiling. Landlords can leverage the strong rental demand and the relatively low median home value to build a portfolio that appreciates over time, especially if they focus on maintaining or slightly improving their properties to command higher rents within the acceptable range.
In conclusion, ZIP 38107 offers a solid foundation for an appreciation play within a Section 8 portfolio strategy. Its low price-cut share, stable market conditions, and high renter share make it a promising investment for landlords and small-portfolio investors looking to capitalize on long-term property value growth.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.