Location: Killeen-Temple, TX | Metro: Killeen-Temple, 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 | $1,000 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,240 |
| 3 Bedrooms | $1,720 |
| 4 Bedrooms | $2,070 |
| 5 Bedrooms | $2,401 |
| 6 Bedrooms | $2,689 |
| 7 Bedrooms | $2,904 |
| 8 Bedrooms | $3,049 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,240 | $120,088 | 1.03% | B |
| 3BR | $1,720 | $204,941 | 0.84% | C |
| 4BR | $2,070 | $258,391 | 0.8% | C |
U.S. Census Bureau data (2024)
The analysis for the Section 8 program in ZIP code 76504, which encompasses parts of Temple, TX, reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR stands at $1220, while the market rent, as measured by the Zillow Rent Index (ZORI), is $1318. This results in a gap of $98 per month, representing an approximate 8% difference between the two figures.
Given that the FMR is lower than the market rent, landlords and small-portfolio investors should be aware of the potential costs associated with accepting housing vouchers. The discrepancy means that landlords might have to accept a lower rental rate compared to what they could charge in the open market, thereby reducing their monthly income by $98 for each voucher tenant. This can impact overall portfolio yields and profitability.
In the context of Temple, TX, where 68.6% of residents are renters, the median home value is $189,413, and the median income is $52,803, the decision to participate in the Section 8 program must be carefully weighed. While the program provides a stable source of rental income, it comes at the expense of not being able to capitalize on the higher market rents. For instance, if a landlord has a property that could command a market rent of $1318, but accepts a voucher tenant paying only $1220, the landlord loses out on $98 per unit per month.
This analysis underscores the importance of understanding local economic conditions and the trade-offs involved in participating in the Section 8 program. In Temple, TX, where the cost of living and median incomes are relatively low, landlords must decide whether the benefits of having guaranteed tenants outweigh the financial loss of renting below market rates. It is crucial to factor in these specifics when making investment decisions in this area.
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.