Section 8 Fair Market Rent (FMR) for ZIP 38645 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

When considering whether to invest in ZIP code 38645 for Section 8 properties, follow this decision tree:

Step 1: Debt Service Coverage Ratio (DSCR)

• If the Fair Market Rent (FMR) of $840 per month can cover the debt service on a property valued at $64,058, proceed to Step 2. Otherwise, the investment is not advisable.

Step 2: Market Rent Comparison

• The market rent in ZIP 38645 is $641 per month based on Census ACS data. Compare this figure to the FMR:
• If the market rent is above the FMR, then the property will likely be overpriced for Section 8 tenants, making it a poor investment choice.
• If the market rent is equal to the FMR, the investment could be viable, but you must ensure that other factors support this decision.
• If the market rent is below the FMR, the property would be underpriced for Section 8 tenants, making it a potentially good investment opportunity.

Step 3: Demand Analysis

• In ZIP 38645, 30% of residents are renters. Additionally, the Days on Market (DOM) is listed as N/A, which means there's no recent data available on how quickly rental properties are being leased.
• If the demand is high (30% renters), and properties are leasing quickly (low DOM), then the investment has strong potential.
• If the demand is high but the DOM is not low, it suggests that while there are many renters, they may not be finding suitable housing quickly, which could indicate competition or other issues affecting demand.
• If the demand is low or uncertain due to incomplete data, the investment is risky and not recommended.

Based on the data provided, if the FMR of $840 can cover the debt service on a property worth $64,058, and the market rent is below the FMR at $641, the ZIP code shows potential for a Section 8 investment. However, without concrete DOM data, the strength of demand remains uncertain, which is a critical factor in ensuring steady occupancy rates. Therefore, the final decision depends on verifying the DSCR and understanding the local rental market dynamics beyond the given figures.

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.