Section 8 Fair Market Rent (FMR) for ZIP 38503 - 2027

FY 2027 Fair Market Rent Rates

To understand the economics of Section 8 in ZIP 38503, it's crucial to first recognize that the SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this specific ZIP code for fiscal year 2026 is set at $1,010. This figure represents the maximum amount that the Housing Choice Voucher program will pay towards rent for a two-bedroom unit in this area.

The SAFMR is calculated based on local rental market conditions and is intended to reflect the cost of housing in a particular ZIP code. However, the local market rent data for ZIP 38503 is currently unavailable, which makes it challenging to directly compare the SAFMR against the prevailing market rates. Despite this, we can still walk through the financial implications for landlords accepting Section 8 vouchers.

A voucher payment consists of two parts: the subsidy from the government and the tenant's contribution. The tenant is generally required to pay 30% of their adjusted income towards rent. This amount is then combined with the utility allowance, which covers the tenant's electricity, gas, water, and sewer costs. The total of these components is what the landlord receives as reimbursement for renting to a Section 8 tenant.

In ZIP 38503, if the SAFMR for a two-bedroom unit is $1,010, and assuming a typical tenant's contribution of around $300 (this figure would vary depending on the individual tenant's income), the landlord would receive approximately $1,310 per month. This includes both the voucher subsidy and the tenant's direct payment.

However, the actual reimbursement gap or surplus depends on the landlord's set rent. If the landlord charges less than $1,010, they might experience a surplus where the voucher pays more than the rent due. Conversely, if the landlord charges more than $1,010, they will face a reimbursement gap, meaning the voucher will only cover up to $1,010, and the tenant must make up the difference from their own funds, which is unlikely given the fixed nature of the voucher payments.

Given the SAFMR of $1,010 and the typical tenant contribution, landlords should aim to charge close to the SAFMR to avoid a significant reimbursement gap. If the local market rent were higher than $1,010, landlords would have to decide whether to accept a lower profit margin or risk losing tenants who rely solely on the voucher program.

In conclusion, landlords in ZIP 38503 should be aware that the SAFMR for a two-bedroom unit is $1,010, and this is the ceiling for government subsidies under the Section 8 program. The total reimbursement, including the tenant's contribution, would typically hover around $1,310. To ensure profitability, landlords must carefully consider their rental pricing strategy relative to this SAFMR figure.

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.