Location: Wayne County, TN | Metro: Lewis County, TN
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 | $820 |
| 1 Bedroom | $830 |
| 2 Bedrooms | $1,080 |
| 3 Bedrooms | $1,290 |
| 4 Bedrooms | $1,480 |
| 5 Bedrooms | $1,717 |
| 6 Bedrooms | $1,923 |
| 7 Bedrooms | $2,077 |
| 8 Bedrooms | $2,181 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,290 | $200,365 | 0.64% | D |
U.S. Census Bureau data (2024)
A landlord considering investing in ZIP code 38485 for Section 8 purposes should follow a structured decision-making process based on the following criteria:
1. Debt Service Coverage Ratio (DSCR): The Fair Market Rent (FMR) for the metro area in fiscal year 2026 is set at $940. To determine if this clears the debt service on a property valued at $170,384, calculate the monthly mortgage payment. Assuming a typical loan-to-value ratio of 80%, a 30-year fixed-rate mortgage, and an interest rate of 4%, the monthly mortgage payment would be approximately $750. With an FMR of $940, this would provide a DSCR of about 1.25, which is generally considered acceptable for rental properties. Therefore, the answer to the first question is Yes.
2. Market Rent Comparison: The average market rent for ZIP 38485, as per the Census ACS, is $357. This figure is significantly below the FMR of $940. Landlords can expect to charge closer to the FMR when renting to Section 8 tenants, which means that the market rent is well below what is possible under the program. Thus, the answer to the second question is that market rent is below FMR, making it a favorable situation for Section 8 landlords.
3. Rental Demand: The percentage of renters in ZIP 38485 is 21.7%. While this percentage is relatively low, the critical factor is the Days on Market (DOM) for rental listings. Unfortunately, the data provided does not specify the DOM for this area, marked as 'N/A'. Without this information, it's challenging to gauge the demand accurately. However, given the significant gap between market rent and FMR, there could be substantial interest from Section 8 participants, suggesting that demand might be sufficient despite the low percentage of renters. The answer here is It Depends.
To summarize, the decision tree for whether a landlord should invest in ZIP 38485 for Section 8 purposes looks like this:
The key takeaway is that while the financial metrics favor Section 8 investments in ZIP 38485, the lack of specific DOM data introduces some uncertainty regarding rental demand. Additional research into local rental market dynamics would be advisable before making a final investment decision.
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.