Location: Wise County, TX | Metro: Dallas, TX HUD Metro FMR Area
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 | $1,190 |
| 1 Bedroom | $1,200 |
| 2 Bedrooms | $1,550 |
| 3 Bedrooms | $2,120 |
| 4 Bedrooms | $2,540 |
| 5 Bedrooms | $2,946 |
| 6 Bedrooms | $3,300 |
| 7 Bedrooms | $3,564 |
| 8 Bedrooms | $3,742 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,120 | $298,214 | 0.71% | D |
| 4BR | $2,540 | $412,689 | 0.62% | D |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 76078 reveals a distinct gap between the federally determined Fair Market Rent (FMR) and the actual market rents. For a two-bedroom property, the FMR set at $1480 per month translates into an annualized income of $17,760. This figure yields a gross rental yield of approximately 4.84%, calculated by dividing the annual income by the median home value of $367,131.
In contrast, the Zillow Observed Rent Index (ZORI) indicates that market rents for a similar property stand at $1,833 per month, which annualizes to $21,996. Using this market rent figure, the gross rental yield jumps to about 6.00%. This higher yield reflects the potential income a landlord could earn if they were able to charge market rates rather than the lower FMR rates associated with Section 8.
The implied gross-yield of 4.84% based on the FMR is significantly lower than the 6.00% based on market rents. Given the 16.4% renter density in ZIP 76078, it's important to note that a substantial portion of the population may be seeking subsidized housing options, which could make properties eligible for Section 8 more attractive to tenants. However, the N/A-day Days on Market (DOM) suggests there is insufficient data to accurately gauge how quickly these properties are rented out under Section 8 versus the open market.
The 6.00% gross-yield from market rents represents a more optimistic scenario, assuming the landlord can secure a tenant willing to pay the going market rate. Yet, the reality for many landlords participating in Section 8 is the 4.84% yield. This lower yield must be weighed against the stability of guaranteed payments and the potential for reduced vacancy periods, though the latter cannot be quantified here due to incomplete DOM data.
Investors should consider these gross-yields as part of their overall strategy. While the 6.00% yield offers a higher return, the 4.84% yield provides a clearer picture of what to expect when relying on Section 8 subsidies. The choice between the two ultimately depends on the investor's risk tolerance and financial goals.
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.