Section 8 Fair Market Rent (FMR) for ZIP 75074 - 2027

Investment Score for ZIP 75074

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	$1,600
1 Bedroom	$1,650
2 Bedrooms	$1,940
3 Bedrooms	$2,440
4 Bedrooms	$3,110
5 Bedrooms	$3,608
6 Bedrooms	$4,041
7 Bedrooms	$4,364
8 Bedrooms	$4,582

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	$1,940	$249,610	0.78%	D
3BR	$2,440	$346,498	0.7%	D
4BR	$3,110	$479,336	0.65%	D
5BR	$3,608	$652,913	0.55%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 75074 (Plano, TX) #### Section 8 Voucher Dynamics In ZIP code 75074, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $2,130 per month. This amount represents 28.8% of the median household income of $88,697. However, the actual rental prices in the area are significantly higher, with the Zillow median price for a two-bedroom property being $253,223. The price-to-FMR ratio is 9.9x, indicating that the actual rent prices are nearly ten times the FMR. This suggests that the FMR is far below the actual market rates, creating significant constraints for voucher holders. They would likely struggle to find landlords willing to accept the voucher amount due to the substantial gap between the FMR and market rents. #### Affordability & Renter Profile ZIP 75074 has a population of 53,831, with 46.5% of residents being renters. This indicates a relatively high demand for rental properties, making it a tight market. The occupancy rate of 96.3% further supports this conclusion, as it shows that most available units are already occupied. Given the median household income of $88,697, the typical renter in this area would have to spend a considerable portion of their income on housing. For instance, a renter paying the FMR for a three-bedroom unit would be spending approximately $2,680 per month, which is about 30.2% of the median income. This level of expenditure leaves little room for other expenses, suggesting that many renters in this area might be financially stretched. #### Investor Angle From an investor perspective, the ZIP code 75074 presents a challenging scenario when considering Section 8 vouchers. The FMRs are substantially lower than the actual market rents, meaning that landlords who rely solely on Section 8 vouchers will face reduced cash flow compared to those who can charge market rates. For example, a landlord renting out a two-bedroom unit at the FMR of $2,130 would be earning less than half of what they could potentially earn by charging the market rate. To assess the investment grade, we need to consider the potential returns and risks. Given the tight market conditions and high occupancy rates, there is a strong likelihood that investors can achieve good occupancy levels. However, the reliance on Section 8 vouchers would limit the ability to maximize rental income. Additionally, the administrative burden and potential delays in receiving payments associated with Section 8 vouchers can affect the overall financial performance of rental properties. #### Specific Actionable Insights 1. **Target Higher-Income Renters**: Given the high median household income and the tight market conditions, investors should consider targeting higher-income renters who can afford to pay market rates. This strategy would provide better cash flow and reduce the dependency on government subsidies. For instance, focusing on properties that can command rents closer to the Zillow median price of $253,223 would yield a much higher return on investment. 2. **Mixed-Income Properties**: Investors could also explore developing mixed-income properties where some units are reserved for Section 8 voucher holders while others are rented at market rates. This approach allows for a balance between social responsibility and financial viability. By ensuring that a portion of the units are affordable, investors can still attract a stable tenant base while generating higher revenue from the market-rate units. 3. **Value-Add Opportunities**: There may be opportunities to acquire underperforming properties and increase their value through renovations or upgrades. This could make them more attractive to higher-income renters willing to pay market rates. For example, upgrading a two-bedroom unit to a three-bedroom unit could potentially increase the rent from $2,130 to $2,680, providing a more substantial cash flow. #### Bottom Line Given the significant disparity between the FMR and actual market rents, along with the high median household income and tight market conditions, the recommendation for Section 8-focused investors is to **skip** this ZIP code. The financial constraints imposed by relying on Section 8 vouchers make it difficult to achieve positive cash flow, especially when compared to the potential earnings from market-rate rentals. Instead, investors should focus on areas where the FMR is closer to market rents or explore strategies that allow them to target higher-income renters directly.

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.