Location: Van Zandt County, TX | Metro: Van Zandt County, TX
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 | $920 |
| 1 Bedroom | $920 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,570 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,570 | $300,616 | 0.52% | F |
U.S. Census Bureau data (2024)
The analysis of Section 8 cap rates for ZIP code 75117 reveals a distinct gap between the federally mandated Fair Market Rent (FMR) and the actual market rents. For a two-bedroom property, the annualized FMR set at $1,240 for FY 2026 reflects a gross yield of approximately 5.17% when compared to the median home value of $278,817. This calculation is derived from multiplying $1,240 by 12 months, resulting in an annual rental income of $14,880. Dividing this figure by the median home value yields the gross yield percentage.
In contrast, the Census ACS reports the market rent for a two-bedroom unit at $875 per month. Annualizing this figure produces an annual rental income of $10,500, which translates to a gross yield of roughly 3.77%. This lower yield is based on the current market conditions and the prevailing rent levels for the area.
The disparity between these two gross yields highlights the potential benefits of participating in the Section 8 program. However, the choice between the two scenarios should be informed by the local rental market dynamics. Given that only 20.3% of residents in ZIP 75117 are renters, the competition for tenants is likely high, especially among those who qualify for Section 8 assistance. This factor suggests that landlords might find it challenging to maintain a steady occupancy rate at the higher FMR level without facing significant delays in finding qualified tenants, indicated by the N/A-day DOM (Days on Market).
The higher gross yield from Section 8 is more stable but comes with the administrative burden and eligibility challenges. The lower gross yield from market rents is more realistic in terms of occupancy and tenant availability, but it offers a less lucrative return. Therefore, while the Section 8 scenario presents a higher gross yield of 5.17%, the actual market conditions suggest that achieving a consistent 3.77% gross yield is more practical. Landlords must weigh the stability of Section 8 income against the ease of securing market-rate tenants.
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.