Section 8 Fair Market Rent (FMR) for ZIP 76502 - 2027

Investment Score for ZIP 76502

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	$1,120
1 Bedroom	$1,120
2 Bedrooms	$1,380
3 Bedrooms	$1,910
4 Bedrooms	$2,310
5 Bedrooms	$2,680
6 Bedrooms	$3,002
7 Bedrooms	$3,242
8 Bedrooms	$3,404

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
2BR	$1,380	$184,676	0.75%	D
3BR	$1,910	$246,127	0.78%	D
4BR	$2,310	$304,221	0.76%	D
5BR	$2,680	$382,468	0.7%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 76502 (Temple, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 76502 in Temple, TX, is set by HUD for 2026. The FMRs are as follows: - 0BR: $1190 - 1BR: $1200 - 2BR: $1490 (which is 21.8% of the median household income) - 3BR: $2070 - 4BR: $2500 These figures represent the maximum rent that a Section 8 voucher holder can pay. However, the actual rents in the area significantly exceed these FMRs. For instance, the Zillow median price for a 2BR property is $183,759, which translates to a monthly rental cost of approximately $1,448 based on a typical mortgage payment. This is already higher than the FMR for a 2BR unit, but the price-to-FMR ratio of 10.3x suggests that the average rental cost for a 2BR unit is around $15,322 annually or roughly $1,277 per month. This means that the actual rental costs are likely much higher than the FMRs, creating significant constraints for voucher holders who may struggle to find units that meet their budget. #### Affordability & Renter Profile The population of Temple, TX, is 52,669, with 35.9% of residents being renters. This indicates a substantial rental market, but it also highlights the affordability challenges faced by many renters. With a median household income of $82,088, the 2BR FMR represents only 21.8% of the median income, suggesting that while the FMR is affordable for the average household, it is still a considerable portion of their income. Given the occupancy rate of 93.4%, the market appears to be relatively tight, indicating a high demand for rental properties. This tightness could exacerbate the difficulties faced by low-income households and Section 8 voucher holders in finding suitable housing. #### Investor Angle From an investor's perspective, the ZIP code 76502 presents a mixed picture. While the FMRs provide a guideline for affordable rents, the actual rental market is much higher, as indicated by the price-to-FMR ratio. An investor looking to operate strictly within the FMR guidelines would face challenges in achieving positive cash flow due to the high actual rental costs. For example, a 2BR unit renting at the FMR of $1,490 per month would generate annual revenue of $17,880, which is far below the implied average rental cost of $15,322 per year based on the price-to-FMR ratio. This suggests that operating at FMR levels would likely result in negative cash flow unless the investor can achieve economies of scale or has very low operating costs. However, if an investor is willing to accept tenants with Section 8 vouchers despite the lower rent, there are still opportunities. The occupancy rate of 93.4% indicates strong demand for rental properties, and the high actual rental prices suggest that there is a robust market for non-voucher tenants. Therefore, an investor might consider a dual strategy where they cater to both voucher and non-voucher tenants, leveraging the high demand to maintain profitability. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, smaller units such as 0BR and 1BR might be more feasible for Section 8 voucher holders. These units have FMRs of $1190 and $1200, respectively, which are closer to the actual rental costs. Investors should consider developing or acquiring properties that offer a mix of smaller and larger units to cater to both voucher and non-voucher tenants. 2. **Target Areas with Lower Actual Rental Costs**: Although the overall market is expensive, there might be pockets within ZIP 76502 where rental costs are closer to the FMRs. Investors should conduct thorough local market research to identify these areas and focus their acquisition efforts there. Additionally, targeting properties that are slightly older or less desirable can help keep rental costs within the FMR range. 3. **Consider Property Management Services**: Given the complexity of managing properties that cater to both voucher and non-voucher tenants, investors should consider using professional property management services. This can help ensure compliance with Section 8 regulations while also handling the day-to-day operations of the property, potentially increasing the likelihood of positive cash flow. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 76502 is to **Skip**. The high actual rental costs compared to the FMRs make it challenging to achieve positive cash flow when relying solely on voucher tenants. However, investors who are willing to adopt a hybrid approach—catering to both voucher and non-voucher tenants—might find the market more appealing. In such cases, focusing on smaller units and areas with lower actual rental costs could be a viable strategy. Nonetheless, the overall tightness of the market and the high price-to-FMR ratio suggest that the risks outweigh the benefits for those strictly interested in Section 8 investments.

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.