Location: Hill County, TX | Metro: Hill County, TX
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 | $800 |
| 1 Bedroom | $870 |
| 2 Bedrooms | $1,100 |
| 3 Bedrooms | $1,520 |
| 4 Bedrooms | $1,730 |
| 5 Bedrooms | $2,007 |
| 6 Bedrooms | $2,248 |
| 7 Bedrooms | $2,428 |
| 8 Bedrooms | $2,549 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,100 | $150,439 | 0.73% | D |
| 3BR | $1,520 | $241,696 | 0.63% | D |
| 4BR | $1,730 | $312,466 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 76645 in Hillsboro, TX, reveals an interesting investment landscape. To begin, let's examine the Fair Market Rent (FMR) and market rent figures for a two-bedroom property, which are critical components in understanding potential yields.
Based on the Federal Fiscal Year 2026 data, the FMR for a two-bedroom apartment in the metropolitan area is set at $1,050 per month. This translates into an annual rental income of $12,600. Given the median home value in Hillsboro, TX, stands at $203,918, we can calculate the implied gross yield from this scenario. The gross yield is calculated by dividing the annual rental income by the property value, resulting in a gross yield of approximately 6.2%.
In contrast, the Census ACS data indicates a market rent of $978 per month for a two-bedroom unit. This equates to an annual rental income of $11,736. Using the same median home value, the gross yield from this market rent scenario is approximately 5.7%.
Given the 34.1% renter density in the area, it is reasonable to conclude that the market rent figure is more reflective of the actual rental environment. A higher proportion of renters suggests a robust demand for rental properties, but it also implies competition among landlords, potentially driving down rents to more market-based levels.
The N/A-day Days on Market (DOM) statistic suggests either an exceptionally quick turnover rate or a lack of comprehensive data. In either case, it indicates a highly active rental market where units are likely to be filled promptly once advertised. However, this does not necessarily mean that all units will command the higher FMR rates, especially considering the significant gap between the FMR and market rent figures.
To summarize, while the FMR provides a gross yield of 6.2%, the more realistic market rent scenario offers a gross yield of 5.7%. For landlords and small-portfolio investors, the latter figure is likely more accurate when assessing the potential returns of a property in ZIP 76645. The difference of 0.5 percentage points in gross yield might seem minor, but over time, it can significantly impact overall profitability. Therefore, it is prudent to base investment decisions on the lower, yet more probable, market rent figure.
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.