Section 8 Fair Market Rent (FMR) for ZIP 75025 - 2027

Investment Score for ZIP 75025

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,870
1 Bedroom	$1,930
2 Bedrooms	$2,270
3 Bedrooms	$2,860
4 Bedrooms	$3,630
5 Bedrooms	$4,211
6 Bedrooms	$4,716
7 Bedrooms	$5,093
8 Bedrooms	$5,348

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$2,270	$320,882	0.71%	D
3BR	$2,860	$420,764	0.68%	D
4BR	$3,630	$564,421	0.64%	D
5BR	$4,211	$686,415	0.61%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 75025 (Plano, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 75025, which is located in Collin County, Texas, has been set by HUD for 2026. For a two-bedroom apartment, the FMR is $2,480. This figure represents 20.8% of the median household income in the area, which stands at $143,260. The FMR is designed to reflect the average rent that a family could afford without paying more than 30% of their income on housing costs. However, the actual rental prices in Plano can be significantly higher than these FMRs. According to the provided data, the Zillow median price for a two-bedroom home in ZIP 75025 is $327,578. This translates to a price-to-FMR ratio of 11.0x, indicating that the market value of homes is much higher than what HUD deems fair for renters. This discrepancy suggests that many voucher holders may struggle to find units that are both affordable and within the FMR guidelines. #### Affordability & Renter Profile ZIP 75025 has a population of 53,202, with 33.8% of residents being renters. The occupancy rate is high at 97.1%, indicating a robust demand for rental properties. Given the median household income of $143,260, the majority of residents are likely well-educated professionals working in industries such as technology, finance, and healthcare, which are prevalent in the Dallas-Fort Worth metroplex. Despite the relatively high median income, the rent-to-income ratio for a two-bedroom unit at $2,480 is still only 20.8%. This means that even without a Section 8 voucher, renting a two-bedroom unit would be manageable for most households. However, the tight market conditions and high occupancy rate suggest that there is significant competition for available rental units, making it challenging for lower-income families to secure housing. #### Investor Angle From an investor perspective, the key question is whether the ZIP code can generate positive cash flow at the FMR levels. Given the FMR for a two-bedroom unit is $2,480, and the Zillow median price for a similar unit is $327,578, the investment grade for this ZIP code is likely to be moderate to low. The high price-to-FMR ratio indicates that the property values are significantly above the rent levels deemed fair by HUD, which can make it difficult for investors to break even when relying solely on Section 8 vouchers. To determine if this ZIP code is cash-flow positive, we need to consider the typical operating expenses, including mortgage payments, property taxes, insurance, maintenance, and other costs. Assuming a conservative estimate of 1% annual property tax, 0.5% annual insurance, and 10% annual maintenance and other expenses, the total cost per year for a $327,578 property would be approximately: - Property Tax: $3,275.78 - Insurance: $1,637.89 - Maintenance and Other Expenses: $32,757.80 Total annual expenses: $37,671.47 Dividing this by 12 months gives us a monthly expense of about $3,139. This is already higher than the FMR for a two-bedroom unit, suggesting that investors would likely face negative cash flow if they were to rely solely on Section 8 vouchers. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors might want to focus on smaller units like one-bedroom apartments. The FMR for a one-bedroom unit is $2,120, which is closer to the actual rental market rates compared to larger units. This could potentially provide better cash flow opportunities. 2. **Consider Non-Section 8 Tenants**: Due to the tight market conditions and high occupancy rate, there is a strong demand for rental properties among non-voucher tenants. Investors should consider marketing their properties to a broader audience, including those who do not require Section 8 assistance. This could help mitigate the risk of negative cash flow and increase the chances of finding reliable tenants. 3. **Location-Specific Strategies**: Within ZIP 75025, certain neighborhoods may offer better opportunities for positive cash flow. Investors should conduct a detailed neighborhood analysis to identify areas where rental prices are closer to the FMR levels. Additionally, proximity to amenities, employment centers, and public transportation can influence rental demand and willingness to pay higher rents. #### Bottom Line Given the high price-to-FMR ratio and the tight market conditions, the recommendation for Section 8-focused investors in ZIP 75025 is to **skip** this ZIP code. The investment grade is low due to the significant gap between property values and the rent levels supported by Section 8 vouchers. Instead, investors might want to explore other ZIP codes with more favorable price-to-FMR ratios and less competitive rental markets. However, for investors willing to diversify their tenant base and include non-Section 8 renters, ZIP 75025 could still present opportunities. These investors should focus on smaller units and carefully select locations within the ZIP code to maximize their chances of positive cash flow.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.