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 | $1,270 |
| 1 Bedroom | $1,380 |
| 2 Bedrooms | $1,510 |
| 3 Bedrooms | $1,990 |
| 4 Bedrooms | $2,300 |
| 5 Bedrooms | $2,668 |
| 6 Bedrooms | $2,988 |
| 7 Bedrooms | $3,227 |
| 8 Bedrooms | $3,388 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,380 | $132,743 | 1.04% | B |
| 2BR | $1,510 | $186,715 | 0.81% | C |
| 3BR | $1,990 | $239,163 | 0.83% | C |
| 4BR | $2,300 | $453,357 | 0.51% | F |
| 5BR | $2,668 | $876,614 | 0.3% | F |
U.S. Census Bureau data (2024)
The Section 8 market in ZIP code 38117, located in Memphis, TN, within the Shelby County and Memphis, TN-MS-AR HUD Metro FMR Area, presents a clear picture of marginal cash flow potential for landlords and small-portfolio investors. The HUD Fair Market Rent (FMR) for this area in fiscal year 2024 is set at $1510, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $1,619. This means that landlords who accept Section 8 vouchers will see their rents fall slightly below the market rate, resulting in a marginal cash flow scenario.
To derive the rent-to-price ratio, we can use the median home value of $267,166. This gives us a ratio of approximately 0.6%, which suggests that rental income alone would not cover the mortgage payment on an average-priced home in this area. Therefore, landlords should consider other factors such as property management fees and potential tax benefits when evaluating investment opportunities.
The dynamics between renting and buying in this market are also noteworthy. With a median Days on Market (DOM) of 51 days and a price-cut share of 0.3%, it appears that the housing market is relatively stable and efficient. However, these metrics do not directly impact the decision to accept Section 8 tenants, as they relate more to the overall health of the real estate market rather than the specific cash flow considerations of voucher tenants.
In summary, landlords in ZIP 38117 will experience marginal cash flow when accepting Section 8 vouchers, as the HUD FMR is slightly lower than the market rent. The rent-to-price ratio further underscores the need for careful financial planning. Given these conditions, the strongest angle for investors is likely to be stability, as the low price-cut share and efficient sales cycle suggest a resilient local real estate market.
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.