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 | $1,060 |
| 1 Bedroom | $1,210 |
| 2 Bedrooms | $1,520 |
| 3 Bedrooms | $1,980 |
| 4 Bedrooms | $2,000 |
| 5 Bedrooms | $2,320 |
| 6 Bedrooms | $2,598 |
| 7 Bedrooms | $2,806 |
| 8 Bedrooms | $2,946 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,520 | $226,405 | 0.67% | D |
| 3BR | $1,980 | $298,558 | 0.66% | D |
| 4BR | $2,000 | $439,609 | 0.45% | F |
| 5BR | $2,320 | $588,268 | 0.39% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 76712, Woodway, TX, involve understanding the SAFMR (Small Area Fair Market Rent) and comparing it to the local market rent. For a two-bedroom apartment, the SAFMR for FY 2024 is set at $1460. This figure represents the maximum amount that the government will reimburse landlords for rent under the Section 8 program for this specific ZIP code.
In contrast, the local market rent, measured by ZORI (Zillow Observed Rent Index), stands at $1657 for a similar unit. This indicates that landlords might be able to charge higher rents outside of the Section 8 program. However, when dealing with Section 8 tenants, the rent cannot exceed the SAFMR without additional approval from the housing authority.
A landlord should know that the total rent is split between the tenant and the government. The tenant is responsible for paying 30% of their adjusted income towards rent. If we assume an average adjusted income of $1400 for a Section 8 tenant in this area, the tenant's portion would be $420. The government then covers the remaining amount up to the SAFMR of $1460. Therefore, the government subsidy would be $1040 in this scenario.
Additionally, landlords must factor in utility allowances. These allowances vary but generally cover the cost of utilities such as electricity, water, and gas. For simplicity, let's say the utility allowance averages around $200 per month. This allowance is given directly to the tenant to manage their own utilities, and it does not affect the landlord's reimbursement directly.
To summarize, in ZIP 76712, a landlord can expect to receive $1460 per month from the government for a two-bedroom apartment under the Section 8 program. With the tenant contributing $420, the total rent collected would be $1880, including the utility allowance. However, since the SAFMR is $1460, the actual reimbursement to the landlord would be $1460, leaving a reimbursement gap of $197 per month compared to the local market rent of $1657.
This reimbursement gap means landlords must decide if they want to accept the lower payment relative to the market or seek alternative tenants willing to pay the full market rate. The decision often depends on the landlord's financial situation and the demand for affordable housing in the area.
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.