Location: San Augustine County, TX | Metro: Nacogdoches County, TX
| Unit Size | Monthly FMR |
|---|---|
| Studio | $940 |
| 1 Bedroom | $990 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,420 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP code 75961 might have several concerns regarding the feasibility of investing in rental properties under the Section 8 program. Here, we address these concerns directly using the available data.
Objection 1: Will the Fair Market Rent (FMR) of $1,110 cover the mortgage on a $192,860 home?
The FMR of $1,110 is designed to reflect the average rent for a modest dwelling in the area. To determine if this amount can cover a mortgage, consider the typical interest rates and loan terms. For a home priced at $192,860, assuming a 20% down payment and an interest rate around 4%, the monthly mortgage payment could be approximately $800. Thus, the FMR of $1,110 is sufficient to cover the mortgage, leaving a buffer of $310 per month for other expenses such as property taxes, insurance, and maintenance.
Objection 2: Is there enough renter demand at 50.1%?
The 50.1% renter occupancy rate suggests that slightly over half of the housing units in ZIP 75961 are occupied by renters. This figure indicates a moderate level of demand but does not provide a complete picture. To fully assess the demand, one would need to look at the vacancy rates and the number of new constructions. However, with a renter occupancy rate of 50.1%, there is a substantial base of potential tenants. The demand for affordable housing under Section 8 tends to remain steady, which can offer a degree of stability to landlords.
Objection 3: Will vouchers keep pace with $875 market rents?
The current market rent of $875 is below the FMR, indicating that the voucher amount should generally cover the rent. However, the key concern is whether the voucher values will increase in line with market rents. Historically, voucher amounts have adjusted annually based on HUD's assessment of local housing costs. While this adjustment has not always perfectly matched market increases, it has typically been close enough to sustain the affordability of housing for voucher recipients. In ZIP 75961, landlords can expect the voucher system to maintain a reasonable alignment with market rents, though exact future figures are not guaranteed.
Investing in ZIP 75961 under the Section 8 program presents both opportunities and challenges. The FMR provides a solid foundation for covering mortgage payments and operational costs. The renter demand, while moderate, is significant and likely to be stable. Lastly, while vouchers may not always match every market fluctuation, they historically align closely with local rent trends, ensuring continued viability for landlords.
Data Sources: FMR data from HUD (2027). 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.