Section 8 Fair Market Rent (FMR) for ZIP 77354 - 2027

Investment Score for ZIP 77354

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	$1,540
1 Bedroom	$1,580
2 Bedrooms	$1,870
3 Bedrooms	$2,520
4 Bedrooms	$3,130
5 Bedrooms	$3,631
6 Bedrooms	$4,067
7 Bedrooms	$4,392
8 Bedrooms	$4,612

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,870	$226,298	0.83%	C
3BR	$2,520	$299,685	0.84%	C
4BR	$3,130	$404,186	0.77%	D
5BR	$3,631	$669,928	0.54%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 77354, Montgomery County, TX #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 77354 indicate that the cost of renting varies significantly based on the number of bedrooms. For a two-bedroom apartment, the FMR is set at $1870 per month, which represents 19.9% of the median household income of $112,504. This suggests that the FMR is relatively affordable compared to the local income levels. However, the actual rent prices can be much higher. The Zillow median price for a two-bedroom home is $222,351, which translates into a monthly mortgage payment of approximately $1,000 assuming a 30-year fixed-rate mortgage at 4.5%. Adding property taxes, insurance, and maintenance costs, the total monthly cost could easily exceed the FMR, making it challenging for voucher holders to find suitable housing. Given the occupancy rate of 87.9%, there is likely limited vacancy for voucher holders, adding further pressure to find affordable units. The constraints for voucher holders include finding landlords who accept vouchers and navigating the high demand for rental properties within their budget. #### Affordability & Renter Profile ZIP code 77354 has a population of 44,900, with 20.1% being renters. This indicates that while the majority of residents own their homes, there is still a significant portion of the population that relies on rental housing. The median household income of $112,504 suggests that the area is relatively affluent, which may contribute to the higher rent prices. The Price-to-FMR ratio of 9.9x for a two-bedroom unit highlights the disparity between the actual market value and the government-set FMR. This ratio implies that the market is tight and that renters, particularly those relying on Section 8 vouchers, face significant challenges in finding affordable housing. The high ratio also indicates that the rental market is not oversupplied; rather, it is competitive and potentially overpriced relative to what the government deems fair. #### Investor Angle From an investor perspective, the ZIP code 77354 presents a mixed picture. While the FMRs provide a benchmark for rental pricing, the actual market prices are substantially higher. For instance, a two-bedroom apartment priced at $1870 would be cash-flow positive if the investor can secure a mortgage payment of around $1,000, plus additional expenses like property taxes and maintenance. However, achieving such a low mortgage payment might be difficult given the high median home value of $222,351. The investment grade in this area would depend on the ability to acquire properties at a price that allows for a reasonable profit margin when renting at FMR rates. Given the high Price-to-FMR ratio, it is likely that most properties would need to be rented above FMR to achieve positive cash flow, which could limit the pool of potential tenants to those without vouchers. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should consider focusing on one-bedroom or studio apartments, where the FMR is lower ($1570 and $1520 respectively). These units are more likely to be rented by voucher holders due to the lower rent threshold. Additionally, smaller units tend to have higher occupancy rates, which can help ensure steady cash flow. 2. **Negotiate with Landlords**: Since the market is tight and the occupancy rate is high, negotiating with existing landlords to accept Section 8 vouchers might be a viable strategy. This could involve offering incentives such as management services or maintenance guarantees to make the deal more attractive. 3. **Consider Alternative Financing**: Given the high Price-to-FMR ratio, traditional financing methods might not be sufficient. Investors could explore alternative financing options, such as hard money loans or private lenders, to purchase properties at a price that allows for positive cash flow when renting at FMR rates. #### Bottom Line For Section 8-focused investors, the ZIP code 77354 presents a challenging environment due to the high Price-to-FMR ratio and tight rental market. The recommendation would be to **Skip** this ZIP code unless investors can secure properties at a significantly discounted price or focus exclusively on smaller units where the FMR is lower. The high median home values and occupancy rates suggest that the market is not conducive to positive cash flow when strictly adhering to FMR guidelines.

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.