Section 8 Fair Market Rent (FMR) for ZIP 76706 - 2027

Investment Score for ZIP 76706

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	$890
1 Bedroom	$1,020
2 Bedrooms	$1,280
3 Bedrooms	$1,670
4 Bedrooms	$1,680
5 Bedrooms	$1,949
6 Bedrooms	$2,183
7 Bedrooms	$2,358
8 Bedrooms	$2,476

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,020	$106,358	0.96%	C
2BR	$1,280	$144,808	0.88%	C
3BR	$1,670	$248,272	0.67%	D
4BR	$1,680	$380,068	0.44%	F
5BR	$1,949	$496,051	0.39%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 76706 (Waco, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 76706 in Waco, TX, is set by HUD for 2026. For a two-bedroom unit, the FMR is $1240. However, the Zillow median price for a two-bedroom home in this area is $145,753, which translates to a monthly rent of approximately $1214 based on a typical rental yield of 5%. This indicates that the actual market rent is slightly below the FMR, but the difference is minimal. The price-to-FMR ratio of 9.8x suggests that the median home value is significantly higher than the FMR, which could be a concern for voucher holders who might struggle to find units within their budget. HUD’s voucher program aims to cover up to 40% of the FMR, meaning a voucher holder could potentially pay up to $496 in rent for a two-bedroom unit. Given that the FMR is $1240, landlords would receive the remaining $744 from the government. This dynamic creates a constraint for voucher holders, as they must find properties where the total rent does not exceed $1240. #### Affordability & Renter Profile ZIP code 76706 has a population of 41,627, with 61.0% of residents being renters. The occupancy rate stands at 87.1%, indicating a fairly tight rental market. With a median household income of $41,656, the majority of renters are likely to be low-income individuals or families. The affordability of housing is a significant issue, as the FMR for a two-bedroom unit represents 35.7% of the median income. This means that many residents are already spending a substantial portion of their earnings on rent, leaving little room for other expenses. Given the high percentage of renters and the relatively low median income, it is clear that this is a market where affordability is a critical factor. The tight rental market suggests that there may be limited options available for those seeking affordable housing, particularly those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 76706 offers a mixed outlook. While the actual market rent for a two-bedroom unit is slightly below the FMR, it still provides a reasonable opportunity for cash flow. Assuming a typical rental yield of 5%, the monthly rent of $1214 derived from the Zillow median price of $145,753 would be just under the FMR. This means that landlords participating in the Section 8 program can expect to receive the full $1240 per month for a two-bedroom unit, making it cash-flow positive. However, the high price-to-FMR ratio of 9.8x raises concerns about the potential for appreciation in property values. This ratio suggests that the median home value is much higher than what tenants can afford through the voucher program, which could lead to slower capital appreciation compared to areas with lower ratios. Additionally, the tight rental market implies that competition among landlords for tenants could be fierce, which may affect long-term profitability. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should focus on acquiring properties where the rent is below the FMR to ensure they can attract voucher holders. For example, a two-bedroom unit renting for $1200 would be ideal, as it leaves a buffer for any maintenance or vacancy issues while still being within the voucher limit. 2. **Consider Multi-Family Properties**: Given the high renter percentage and tight market, multi-family properties offer a better chance of consistent cash flow. A property with multiple units can spread the risk across several tenants, reducing the impact of any single tenant issue. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help streamline the process of getting properties approved for the Section 8 program. This can reduce the time and effort required to secure tenants and manage the rental process. #### Bottom Line For Section 8-focused investors, ZIP code 76706 presents a moderately attractive opportunity. The cash-flow potential is positive, but the high price-to-FMR ratio and tight rental market suggest that the area may not offer strong capital appreciation. Therefore, the recommendation is to **Hold** investments in this ZIP code if you already have properties that are performing well. If you are considering new investments, carefully evaluate the specific units to ensure they meet the criteria for affordability and are likely to attract voucher holders. Overall, the market dynamics make it a stable but not highly lucrative investment option for Section 8 properties.

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.