Location: Memphis, TN | Metro: Memphis, TN-MS-AR HUD Metro FMR Area
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 | $960 |
| 1 Bedroom | $1,040 |
| 2 Bedrooms | $1,140 |
| 3 Bedrooms | $1,500 |
| 4 Bedrooms | $1,740 |
| 5 Bedrooms | $2,018 |
| 6 Bedrooms | $2,260 |
| 7 Bedrooms | $2,441 |
| 8 Bedrooms | $2,563 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,500 | $229,678 | 0.65% | D |
U.S. Census Bureau data (2024)
To determine if you should buy in ZIP code 72364 for Section 8 investment, follow this decision tree:
1) Does FMR ($1160) clear debt service on a $237,231 property?
Yes: If your debt service (including mortgage payments, property taxes, insurance, and maintenance) is less than $1160 per month, then the Fair Market Rent (FMR) for the area will cover your costs. This makes ZIP 72364 a viable option for Section 8 properties.
No: If your debt service exceeds $1160 per month, the FMR does not sufficiently cover your expenses. Investing in this ZIP code would result in a financial loss for Section 8 tenants.
2) Is market rent ($1,059 ZORI) above, at, or below FMR?
Above FMR: If the market rent is higher than the FMR, you can charge more than what Section 8 covers. This situation allows for some flexibility in pricing but also means that only a portion of your tenants might be on Section 8.
At FMR: If the market rent equals the FMR, you can expect to fully cover your costs with Section 8 tenants without any surplus. This scenario provides stable income but leaves little room for error.
Below FMR: If the market rent is lower than the FMR, you can charge the higher FMR rate to Section 8 tenants, which is beneficial. However, this could make it harder to attract non-Section 8 tenants who might be looking for cheaper rent.
3) Are 31.1% renters + 30-day Days on Market (DOM) enough demand?
Yes: With 31.1% of the population renting and an average DOM of 30 days, there is sufficient demand to ensure quick tenancy. This is a positive indicator for the stability and profitability of a rental property in ZIP 72364.
No: If the rental market is saturated or if the DOM is significantly longer than 30 days, it suggests low demand or difficulty in finding tenants. In such a case, investing in this ZIP code would not be advisable due to potential vacancy issues.
It Depends: If the rental percentage is close to 31.1%, and the DOM fluctuates around 30 days, the demand is marginal. You should consider other factors such as the local economy, job growth, and competition before making a final decision.
The key to success in ZIP 72364 lies in balancing the FMR against your debt service and understanding the local rental market dynamics. The demand indicators suggest a healthy market, but it's crucial to ensure that the FMR adequately covers your costs.
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.