Location: Henderson County, TN | Metro: Decatur County, TN
| Unit Size | Monthly FMR |
|---|---|
| Studio | $770 |
| 1 Bedroom | $880 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,320 |
| 4 Bedrooms | $1,370 |
| 5 Bedrooms | $1,589 |
| 6 Bedrooms | $1,780 |
| 7 Bedrooms | $1,922 |
| 8 Bedrooms | $2,018 |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP code 38328 might raise several concerns regarding the feasibility of investing in rental properties under the Section 8 program. Here, we address those key objections with the available data.
Objection 1: Will Fair Market Rent (FMR) of $930 (metro FY 2026) cover the mortgage on a $227,952 home?
The FMR of $930 for ZIP 38328 is a critical figure for landlords considering participation in the Section 8 program. To determine if this amount can cover a mortgage, one must consider the interest rate and term length of the loan. Assuming a standard 30-year fixed-rate mortgage at an average rate of 5%, the monthly mortgage payment on a $227,952 home would be approximately $1,200. This indicates that the FMR of $930 alone will not cover the mortgage payment. However, it's important to note that the FMR is designed to reflect a reasonable rental price, and landlords can potentially supplement the income with other sources such as co-pays from tenants or additional units in their portfolio.
Objection 2: Is there enough renter demand at 4.4%?
The rental vacancy rate of 4.4% in ZIP 38328 suggests a relatively balanced market, but it does not provide a complete picture of the demand for rental properties. A vacancy rate below 5% typically indicates a competitive rental market, which could mean strong demand for affordable housing options. However, the 4.4% figure alone does not specify the demand for Section 8 rentals specifically. To make a well-informed decision, investors should research local tenant populations and the number of families participating in the Section 8 program to gauge the actual demand for subsidized housing.
Objection 3: Will vouchers keep pace with N/A market rents?
The concern over whether vouchers will match the rising market rents is valid, especially given the lack of specific data on future rent increases. The Housing Choice Voucher Program aims to ensure that voucher amounts remain competitive with market rates, but the exact adjustment figures are not always predictable. Historically, voucher amounts have increased annually to keep up with inflation and market conditions. For ZIP 38328, where current market rents are not specified, investors must monitor local economic indicators and housing trends to anticipate potential discrepancies between voucher payments and market rents. Engaging with local housing authorities can also provide insights into how they manage voucher allocations in response to changing market conditions.
In summary, while the FMR of $930 does not fully cover the mortgage on a $227,952 home, supplementary incomes and a competitive rental market at 4.4% vacancy rate offer some reassurance. The uncertainty around future market rents and voucher adjustments requires ongoing attention and adaptation to local economic conditions.
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.