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 | $840 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,310 |
| 4 Bedrooms | $1,510 |
| 5 Bedrooms | $1,752 |
| 6 Bedrooms | $1,962 |
| 7 Bedrooms | $2,119 |
| 8 Bedrooms | $2,225 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,310 | $78,264 | 1.67% | A+ |
U.S. Census Bureau data (2024)
ZIP code 38126, located within the Memphis, TN-MS-AR HUD Metro FMR Area, presents a unique profile when compared to other ZIP codes in the region. Its Fair Market Rent (FMR) for fiscal year 2024 is set at $930, while the market rent stands at $787. This indicates that the actual rental prices are lower than the FMR, suggesting a potential value pocket for landlords and investors looking to offer subsidized housing.
The median home value in ZIP 38126 is $75,905, which is notably below the typical home values found in the broader Memphis area. Despite the lower home values, the renter share in this ZIP is quite high at 87.6%. This combination of a high renter share and relatively low home values often points to a strong demand for affordable rental housing, making it an attractive location for Section 8 properties.
To further contextualize, let's compare these figures to the typical characteristics of ZIP codes within the Memphis, TN-MS-AR HUD Metro FMR Area. Generally, ZIP codes in this area have higher median home values and a mix of renter shares, but the presence of a significant number of renters coupled with lower property costs can indicate a sweet spot for Section 8 investments.
The discrepancy between the FMR ($930) and the market rent ($787) suggests that there is room for landlords to potentially increase rents without exceeding the FMR threshold, thereby improving their profitability. However, given the high renter share and lower home values, it's important to note that this ZIP code likely has a substantial population reliant on rental assistance programs, including Section 8 vouchers.
In summary, ZIP 38126 appears to be a value pocket within the larger Memphis metropolitan area. The lower median home value combined with a high renter share makes it particularly suitable for Section 8 properties. Landlords and investors should consider this ZIP code as an opportunity to enter a market with strong demand for affordable rentals, while also benefiting from the support of government-subsidized housing programs.
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.