Section 8 Fair Market Rent (FMR) for ZIP 38166 - 2027
Location: Memphis, TN | Metro: Memphis, TN-MS-AR HUD Metro FMR Area
FY 2027 Fair Market Rent Rates
| Unit Size |
Monthly FMR |
| Studio | $1,090 |
| 1 Bedroom | $1,190 |
| 2 Bedrooms | $1,300 |
| 3 Bedrooms | $1,720 |
| 4 Bedrooms | $1,980 |
| 5 Bedrooms | $2,297 |
| 6 Bedrooms | $2,573 |
| 7 Bedrooms | $2,779 |
| 8 Bedrooms | $2,918 |
To determine if you should buy in ZIP code 38166 for Section 8 purposes, follow this decision tree:
1) Does the Fair Market Rent (FMR) of $1300 cover debt service?
- Yes: The FMR of $1300 can clear debt service on properties where the monthly mortgage payment, including taxes and insurance, is less than or equal to $1300.
- No: If the monthly debt service exceeds $1300, then the FMR does not cover the costs, making it unprofitable to invest in Section 8 properties without additional income sources.
- It Depends: For properties with a debt service close to $1300, consider potential cost savings from tax credits or other subsidies.
2) How does the market rent compare to the FMR?
- Above: If the market rent is higher than $1300, you will likely need to offer competitive rates to attract tenants, which may mean accepting lower profits or subsidizing the difference.
- At: When market rents match the FMR, Section 8 vouchers can fully cover the rent, simplifying tenant selection and ensuring steady income.
- Below: If market rents are below $1300, Section 8 vouchers can still be advantageous as they ensure timely payments and reduce vacancy risk.
3) Is there sufficient demand based on the percentage of renters and days on market (DOM)?
- Yes: If the rental market has a high percentage of renters and low DOM, indicating quick turnover and strong demand, Section 8 investment can be profitable and stable.
- No: Low percentages of renters combined with high DOM suggest weak demand, making it harder to find and retain tenants, even with Section 8 vouchers.
- It Depends: Moderate levels of both renters and DOM require further analysis. Look into local job markets, population growth, and the availability of other affordable housing options.
Based on the specific conditions of ZIP 38166, your decision to invest in Section 8 properties should hinge on these factors. Ensure that the FMR adequately covers your debt service, assess how market rents compare to FMR, and evaluate the overall demand for rentals in the area.
Data Sources: FMR data from HUD (2027).
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.