Section 8 Fair Market Rent (FMR) for ZIP 76542 - 2027

Investment Score for ZIP 76542

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	$1,000
1 Bedroom	$1,000
2 Bedrooms	$1,230
3 Bedrooms	$1,710
4 Bedrooms	$2,060
5 Bedrooms	$2,390
6 Bedrooms	$2,677
7 Bedrooms	$2,891
8 Bedrooms	$3,036

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	$1,230	$162,513	0.76%	D
3BR	$1,710	$222,955	0.77%	D
4BR	$2,060	$276,810	0.74%	D
5BR	$2,390	$335,997	0.71%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 76542 (Killeen, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 76542, as of 2026, is set at $1360 for a two-bedroom unit, which represents approximately 22.0% of the median household income of $74,055. However, the actual rental market price for a two-bedroom unit is significantly higher, with Zillow reporting a median price of $152,529. This translates into a price-to-FMR ratio of 9.3x, indicating that actual market rents are much higher than the FMR. For voucher holders, this means they face significant constraints in finding affordable housing. The FMR is designed to cover a reasonable portion of rent for a two-bedroom unit, but given the high actual market prices, it becomes challenging for tenants to find units that accept vouchers and fall within the FMR limits. Landlords might be hesitant to accept vouchers due to the lower payment compared to market rates. #### Affordability & Renter Profile In ZIP code 76542, 34.7% of the population are renters, and the occupancy rate stands at 94.3%, suggesting a relatively tight rental market. With a median household income of $74,055, the affordability of housing is a concern for many residents, especially those relying on Section 8 vouchers. Given that the FMR for a two-bedroom unit is only $1360, while the actual market price is $152,529, it is clear that the majority of rental properties are priced well above what most voucher recipients can afford. This ZIP code likely attracts a diverse mix of renters, including military personnel and their families, who form a significant part of Killeen’s population due to its proximity to Fort Hood. Additionally, there could be a substantial number of low-income families and individuals who rely on government assistance to secure housing. The tight market conditions indicate that there is strong demand for rental properties, but the supply of affordable units is limited. #### Investor Angle From an investor perspective, the ZIP code 76542 presents a mixed picture when considering the FMR and actual market rents. At the FMR of $1360 for a two-bedroom unit, the cash flow potential for landlords accepting Section 8 vouchers would be modest, particularly when compared to the actual market rents. However, the high occupancy rate suggests that there is a steady demand for rental properties, which could provide some stability. To determine the investment grade, we need to consider the balance between rental income and property expenses. While the FMR is lower than market rents, the high occupancy rate indicates that there is a consistent tenant pool. For investors focusing solely on Section 8 vouchers, the primary constraint is the limited number of units that will accept the lower rent payments. This could make it difficult to achieve a positive cash flow unless the investor can secure below-market-rate properties or manage costs effectively. #### Specific Actionable Insights 1. **Target Below-Market-Rate Properties**: Investors should focus on acquiring properties that are priced below the market average but still within the FMR range. For example, targeting a two-bedroom unit priced around $1360 would ensure compliance with Section 8 requirements and potentially offer a positive cash flow if managed efficiently. 2. **Consider Military Housing Needs**: Given the presence of Fort Hood, there is a significant demand for affordable housing among military personnel and their families. Investors could tailor their offerings to meet these needs, such as providing units with amenities that appeal to military tenants, like proximity to bases and schools. 3. **Negotiate with Local Authorities**: Engaging with local housing authorities to understand the dynamics of voucher distribution and any incentives available for landlords who accept Section 8 vouchers could provide additional leverage. This could include understanding waitlists, voucher utilization rates, and any subsidies or tax benefits that might enhance profitability. #### Bottom Line For investors focused on Section 8 vouchers, the recommendation for ZIP code 76542 is to **Hold**. While the FMR is significantly lower than market rents, the high occupancy rate and strong demand for rental properties provide a stable environment. However, the challenge lies in finding properties that can be rented out at or below the FMR without sacrificing profitability. Investors should carefully evaluate the cost structure and seek opportunities where they can negotiate better terms with local authorities or target specific segments of the rental market, such as military families, to maximize their chances of success.

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.