Location: Carroll County, TN | Metro: Gibson County, TN HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,000 |
| 3 Bedrooms | $1,240 |
| 4 Bedrooms | $1,560 |
| 5 Bedrooms | $1,810 |
| 6 Bedrooms | $2,027 |
| 7 Bedrooms | $2,189 |
| 8 Bedrooms | $2,298 |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 38220 is centered around the discrepancy between the Fair Market Rent (FMR) set at $860 for fiscal year 2024 and the actual market rent reported at $764 based on the latest Census American Community Survey (ACS) data. This gap amounts to $96, which represents approximately a 12.6% premium over the market rent. The implication of this premium is that landlords and small-portfolio investors can leverage the Section 8 program to achieve higher yields compared to what they would receive in the open market.
The rationale behind this premium is straightforward: the FMR established by the Department of Housing and Urban Development (HUD) is designed to ensure that rental properties participating in the Section 8 program can cover their costs and still provide a reasonable profit margin. In ZIP 38220, where only 15.0% of the population are renters, the demand for affordable housing is relatively low, making it advantageous for landlords to participate in the Section 8 program to secure a stable income source at a rate above the local market average.
Moreover, the median home value in the area is $149,047, indicating a moderate to upper-middle-class neighborhood. With a median income of $46,791, many residents may find it challenging to afford homes at market rates without assistance. Thus, the Section 8 program serves as a crucial financial bridge, allowing those who qualify to access housing that would otherwise be out of reach. For landlords, this means that despite the administrative overhead associated with the program, the guaranteed payment at the FMR level ensures a steady and profitable cash flow.
In summary, the $96 or 12.6% premium offered by the Section 8 program over the market rent in ZIP 38220 makes it an attractive option for landlords seeking to maximize their returns. The demographic context of the area, with its moderate renter population and median income levels, further supports the viability of this strategy. Investors should consider these factors when evaluating potential properties for inclusion in the Section 8 program.
Data Sources: FMR data from HUD (2027). 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.