Location: Houston-The Woodlands-Sugar Land, TX | Metro: Houston-The Woodlands-Sugar Land, 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 | $840 |
| 1 Bedroom | $860 |
| 2 Bedrooms | $1,020 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,700 |
| 5 Bedrooms | $1,972 |
| 6 Bedrooms | $2,209 |
| 7 Bedrooms | $2,386 |
| 8 Bedrooms | $2,505 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $860 | $95,930 | 0.9% | C |
| 2BR | $1,020 | $139,244 | 0.73% | D |
| 3BR | $1,370 | $181,341 | 0.76% | D |
| 4BR | $1,700 | $211,192 | 0.8% | C |
U.S. Census Bureau data (2024)
If a landlord is considering purchasing a property in ZIP code 77012 (Houston, TX) for Section 8 investment, they should follow a decision tree based on the following criteria:
1) Does the Fair Market Rent (FMR) of $930 cover the debt service on a $155,847 property?
To determine this, calculate the monthly mortgage payment using typical financing terms. Assuming a 30-year fixed-rate mortgage at an interest rate of 4%, the monthly principal and interest payment would be approximately $740. This does not include property taxes, insurance, and maintenance costs, which can add another $200-$300 per month. Therefore, the total debt service could range from $940 to $1,040.
Yes: If the landlord can keep operating costs below $100 per month, then the $930 FMR will cover the debt service.
No: If the landlord's total debt service exceeds $930, then relying solely on Section 8 payments will not be sufficient. The landlord would need to consider additional income sources or subsidies.
It Depends: If the landlord has higher operating costs, they may need to evaluate if there are other ways to reduce expenses or if they can supplement the income with non-Section 8 tenants.
2) Is the market rent of $974 above, at, or below the FMR?
The market rent is slightly above the FMR, indicating that the landlord could potentially command a rent premium over what the government pays for Section 8 vouchers.
Yes: If the landlord plans to manage a mix of Section 8 and market-rate tenants, the $974 market rent suggests there is a viable opportunity to increase overall portfolio income.
No: If the landlord intends to rely solely on Section 8 tenants, the market rent being above the FMR means they cannot fully leverage the higher market rates.
It Depends: The landlord might want to consider the proportion of Section 8 versus market-rate tenants they plan to have, as well as the likelihood of finding market-rate tenants willing to pay $974 in this area.
3) Are 62.1% renters and N/A-day days on the market (DOM) enough demand?
The high percentage of renters (62.1%) indicates strong rental demand. However, without specific DOM data, it's unclear how quickly properties are rented out once listed.
Yes: If the landlord is confident that properties in this area rent quickly despite the lack of specific DOM data, the strong rental demand supports the viability of a Section 8 investment.
No: If the landlord finds that properties take longer to rent out than expected, the strong rental percentage alone may not justify the investment.
It Depends: The landlord should research further into the local rental market dynamics, such as vacancy rates and average time to rent, to make a more informed decision about the potential success of a Section 8 property in ZIP 77012.
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.