Location: Walker County, 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 | $1,270 |
| 1 Bedroom | $1,310 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $2,060 |
| 4 Bedrooms | $2,570 |
| 5 Bedrooms | $2,981 |
| 6 Bedrooms | $3,339 |
| 7 Bedrooms | $3,606 |
| 8 Bedrooms | $3,786 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,540 | $169,136 | 0.91% | C |
| 3BR | $2,060 | $227,282 | 0.91% | C |
| 4BR | $2,570 | $275,864 | 0.93% | C |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 77378, located in Willis, TX, within Montgomery County, can be dissected into several key components to understand how it affects landlords and small-portfolio investors. For fiscal year 2024, the SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this specific ZIP code is set at $1200. This figure represents the maximum amount that the Housing Choice Voucher program will reimburse landlords per month for rent.
In contrast, the local market rent for a two-bedroom unit in ZIP 77378, as indicated by ZORI (Zillow Observed Rent Index), is $1,761. This means that the average rental price in the area exceeds the SAFMR by approximately $561. Landlords who participate in the Section 8 program must understand the difference between these two figures and how they impact their income.
The actual payment a landlord receives from a Section 8 voucher is calculated based on the SAFMR and includes two primary components: the tenant's portion of the rent and any utility allowances. Typically, tenants contribute 30% of their adjusted income towards rent. If a tenant's adjusted income is $1,000, they would pay $300 towards the rent, leaving the remaining $900 to be covered by the voucher. However, the total reimbursement cannot exceed the SAFMR of $1200.
In addition to the base rent, utility allowances are also factored into the voucher payment. These allowances vary but are designed to cover reasonable costs for electricity, water, and gas. For ZIP 77378, the utility allowance is around $200 per month. This means that the total reimbursement a landlord could receive from a Section 8 voucher for a two-bedroom apartment might be $1,200 for rent plus $200 for utilities, totaling $1,400.
Given that the local market rent is $1,761, landlords participating in the Section 8 program in ZIP 77378 will experience a monthly reimbursement gap of about $361. This gap represents the difference between the market rent and the total reimbursement received from the voucher. Therefore, landlords must weigh the benefits of stable, government-backed tenants against the lower income compared to market rates.
To summarize, the SAFMR for a two-bedroom apartment in ZIP 77378 is $1200, while the local market rent is $1,761. A landlord can expect a total reimbursement of around $1,400 when including utility allowances, leading to a monthly surplus gap of $361. This economic reality should guide landlords and small-portfolio investors in deciding whether to participate in the Section 8 program.
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.