Section 8 Fair Market Rent (FMR) for ZIP 77007 - 2027

Investment Score for ZIP 77007

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	$1,850
1 Bedroom	$1,900
2 Bedrooms	$2,250
3 Bedrooms	$3,030
4 Bedrooms	$3,760
5 Bedrooms	$4,362
6 Bedrooms	$4,885
7 Bedrooms	$5,276
8 Bedrooms	$5,540

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	$1,900	$265,361	0.72%	D
2BR	$2,250	$386,295	0.58%	F
3BR	$3,030	$502,377	0.6%	D
4BR	$3,760	$913,192	0.41%	F
5BR	$4,362	$1,585,867	0.28%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 77007 (Houston, TX) #### Section 8 Voucher Dynamics In ZIP code 77007, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $2360 per month for 2026. This amount represents approximately 19.5% of the median household income of $144,911, which is quite reasonable compared to national standards. However, the actual rental market in this area is significantly higher. The Zillow median price for a two-bedroom property is $391,382, indicating that the typical rent for such a unit would be much higher than the FMR. The price-to-FMR ratio of 13.8x suggests that the actual rent could be around $32,568 annually, or about $2714 monthly, based on the Zillow median price. This means that Section 8 voucher holders face significant constraints in finding suitable housing. The FMR is far below the actual market rates, making it challenging for renters to find properties that accept their vouchers without substantial out-of-pocket expenses. For example, a tenant with a two-bedroom voucher would need to pay an additional $354 per month to cover the gap between the FMR and the actual rent, assuming the average rental rate aligns with the Zillow median price. #### Affordability & Renter Profile ZIP code 77007 has a high occupancy rate of 91.7%, indicating a tight rental market. With 53.8% of the population being renters, there is a significant demand for rental properties. The median household income of $144,911 suggests that the area attracts a relatively affluent demographic, but the high rent-to-income ratio implies that even those with higher incomes may struggle to find affordable housing. The FMR for a two-bedroom unit at $2360 is only 19.5% of the median income, which is favorable for affordability. However, the actual rental costs are much higher, making it difficult for lower-income households to afford living here. The tight market and high rent-to-income ratio suggest that there is little room for oversupply, and landlords can maintain high rents due to strong demand. #### Investor Angle From an investor perspective, the ZIP code 77007 presents a mixed picture. While the median home value is high, the rental market is also robust. However, the FMR set by HUD is significantly lower than the actual rental rates, which poses challenges for investors who rely solely on Section 8 vouchers. To determine if this ZIP code is cash-flow positive at FMR, we must consider the actual rental rates versus the FMR. If the average rent is around $2714, then a landlord accepting a Section 8 voucher for a two-bedroom unit at $2360 would have a shortfall of $354 per month. This shortfall needs to be covered either through additional rent from non-voucher tenants or by adjusting the property's management strategy. Given the high occupancy rate and the affluent demographic, there is potential for cash flow positivity if investors can attract a mix of Section 8 and market-rate tenants. However, relying solely on Section 8 vouchers would likely result in negative cash flow due to the low FMR relative to actual market rates. The investment grade for this ZIP code is moderate to high risk. Investors need to carefully balance the number of Section 8 vouchers they accept with the number of market-rate tenants to ensure profitability. Additionally, the high median home value and tight rental market indicate that this area is desirable, but the high cost of living and rental rates make it less attractive for purely Section 8-focused investments. #### Specific Actionable Insights 1. **Diversify Tenant Mix**: To achieve positive cash flow, investors should aim to diversify their tenant mix. Accepting a combination of Section 8 vouchers and market-rate tenants can help offset the shortfall. For instance, a landlord could accept one Section 8 voucher tenant and one market-rate tenant in a duplex, ensuring that the total rent covers the mortgage and operating costs. 2. **Target Lower-Rent Units**: Given the high price-to-FMR ratio, targeting properties with lower rent-to-value ratios might be more profitable. For example, focusing on one-bedroom units where the FMR is $1980 and the actual rent is closer to the FMR could provide better returns. Alternatively, investing in areas with slightly lower median home values but still within the same general vicinity could offer more favorable rental rates. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 77007 is to **Skip**. The high price-to-FMR ratio and tight rental market make it challenging to achieve positive cash flow when relying solely on Section 8 vouchers. Investors should consider other ZIP codes with more favorable FMR-to-market rent ratios or explore strategies that include a mix of Section 8 and market-rate tenants to ensure profitability. However, for investors willing to manage a diversified tenant portfolio, there may be opportunities to invest in this ZIP code. The key will be balancing the number of Section 8 vouchers with market-rate tenants to cover the shortfall and achieve positive cash flow.

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.