Section 8 Fair Market Rent (FMR) for ZIP 75227 - 2027

Investment Score for ZIP 75227

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	$1,220
1 Bedroom	$1,260
2 Bedrooms	$1,480
3 Bedrooms	$1,860
4 Bedrooms	$2,370
5 Bedrooms	$2,749
6 Bedrooms	$3,079
7 Bedrooms	$3,325
8 Bedrooms	$3,491

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,260	$139,089	0.91%	C
2BR	$1,480	$166,479	0.89%	C
3BR	$1,860	$227,679	0.82%	C
4BR	$2,370	$288,991	0.82%	C
5BR	$2,749	$313,254	0.88%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 75227 (Dallas, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 75227 is set by HUD for 2026. For a two-bedroom apartment, the FMR is $1590. However, the actual median rent for a two-bedroom unit in this area, based on Zillow data, is $168,005, which translates to approximately $1400 per month when considering typical mortgage payments and property taxes. This means that the actual rent is slightly below the FMR, but still relatively high compared to the median household income of $64,008. The price-to-FMR ratio of 8.8x indicates that the median home value is significantly higher than the rental rates, suggesting that the housing market is skewed towards homeownership rather than rentals. For voucher holders, the FMR serves as a benchmark for what they can afford. In ZIP 75227, a two-bedroom apartment at $1590 would consume 29.8% of the median household income. This is a substantial portion, indicating that voucher holders face significant constraints in finding affordable housing. They must navigate a market where rents are close to the FMR and where the occupancy rate is high at 93.5%, meaning there is little vacancy to negotiate lower rates. #### Affordability & Renter Profile ZIP 75227 has a population of 58,319, with 43.7% being renters. Given the median household income of $64,008, the affordability of housing is a critical issue for many residents. The median rent for a two-bedroom apartment at $1400 per month is a significant expense, especially for those relying on Section 8 vouchers. The fact that 29.8% of the median income is required for a two-bedroom apartment suggests that the majority of renters are likely to be low-income families who need assistance to afford housing. The high occupancy rate of 93.5% indicates that the rental market is tight, with limited availability and potentially rising rents. This tight market could make it difficult for new renters, particularly those with Section 8 vouchers, to find suitable housing. Additionally, the high demand for rental units might lead to landlords preferring tenants without vouchers due to the administrative burden and potential delays in payment processing. #### Investor Angle From an investor perspective, the key question is whether properties in ZIP 75227 can generate positive cash flow at the FMR levels. With a two-bedroom apartment renting at $1590 per month, investors need to consider the cost of acquisition, maintenance, and other expenses. The median home value of $168,005 suggests that properties are relatively inexpensive, but the high price-to-FMR ratio of 8.8x implies that rental properties may not be as profitable as residential homes. To determine if this ZIP is cash-flow positive, we need to estimate the total monthly costs for an investor. Assuming a mortgage payment of around $700 per month, property taxes of $200, insurance of $100, and maintenance costs of $100, the total monthly expenses would be approximately $1100. At an FMR of $1590, this leaves a net cash flow of about $490 per month, which is positive but modest. The investment grade for this ZIP can be considered moderate. While there is a positive cash flow, the tight rental market and high demand suggest that competition among investors could drive up property values and reduce profit margins. Furthermore, the administrative complexities associated with managing Section 8 voucher tenants might deter some investors. #### Specific Actionable Insights 1. **Focus on Multi-Family Properties**: Given the high demand for rental units and the tight market, investing in multi-family properties could provide better returns. A two-bedroom apartment renting at $1590 per month would yield a higher overall cash flow compared to single-family homes. For instance, a four-unit building with each unit renting at $1590 would generate $6360 in monthly income, which is more substantial than the income from a single unit. 2. **Consider Property Location and Condition**: Within ZIP 75227, certain neighborhoods may offer better opportunities for positive cash flow. Investors should focus on areas with slightly lower median rents or properties that require minimal renovation, thereby reducing upfront costs. Additionally, targeting properties that are already occupied by voucher holders can minimize vacancy risks and ensure steady income. 3. **Engage with Local Real Estate Agents**: To navigate the tight rental market effectively, investors should work closely with local real estate agents who have experience dealing with Section 8 voucher holders. These agents can provide valuable insights into the local rental dynamics and help identify properties that are more likely to attract tenants with vouchers. #### Bottom Line For Section 8-focused investors, ZIP 75227 presents a mixed opportunity. While the market offers positive cash flow, the tight rental environment and high competition may limit profitability. Therefore, the recommendation is to **Hold** investments in this ZIP code. Investors should carefully evaluate the specific location and condition of properties before committing to purchases, ensuring that they can manage the administrative complexities associated with Section 8 vouchers effectively. In summary, ZIP 75227 is a challenging yet potentially rewarding market for investors interested in Section 8 properties. The high demand for rental units and the presence of a significant number of low-income renters make it a viable option, but the tight market conditions and high price-to-FMR ratio necessitate a cautious approach.

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.