Location: Waco, TX | Metro: Waco, 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 | $900 |
| 1 Bedroom | $1,050 |
| 2 Bedrooms | $1,300 |
| 3 Bedrooms | $1,670 |
| 4 Bedrooms | $1,710 |
| 5 Bedrooms | $1,984 |
| 6 Bedrooms | $2,222 |
| 7 Bedrooms | $2,400 |
| 8 Bedrooms | $2,520 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,670 | $262,366 | 0.64% | D |
U.S. Census Bureau data (2024)
The median income in ZIP code 76701 stands at $30,313, which paints a clear picture of the financial landscape faced by renters. The market rate for rent, according to Census ACS data, is $978 per month. This figure represents a significant portion of the average household's income, making it challenging for many residents to afford market-rate housing without financial strain.
In comparison, the Fair Market Rent (FMR) standard set by the voucher payment system for zip code 76701 in fiscal year 2024 is $1480. This higher amount is designed to cover the cost of housing in areas where the market rate exceeds the typical income levels. However, the discrepancy between the market rate of $978 and the FMR of $1480 highlights a notable affordability gap for those relying solely on their income to pay rent.
The area has a high concentration of renters, with 89.8% of the population being tenants. Given the total population of 1,871, this means that approximately 1,680 people are looking for rental housing. Such a dense rental market can intensify competition among landlords, especially when considering the limited financial resources of most households. Landlords must navigate the balance between attracting tenants who can afford the rent and those who might rely on voucher programs.
The takeaway for landlords is clear: while there is a strong demand for rental properties, the income levels in ZIP 76701 suggest that voucher-paying tenants could be crucial to maintaining occupancy rates. Accepting vouchers, despite the lower profit margin compared to cash-paying tenants, ensures a steady stream of income and reduces vacancy rates. For landlords aiming to maximize profits, targeting the smaller segment of cash-paying tenants who can afford market rates may also be viable, but they must be prepared for fiercer competition and possibly longer vacancy periods.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.