Location: Grimes 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 | $980 |
| 1 Bedroom | $1,000 |
| 2 Bedrooms | $1,190 |
| 3 Bedrooms | $1,600 |
| 4 Bedrooms | $1,980 |
| 5 Bedrooms | $2,297 |
| 6 Bedrooms | $2,573 |
| 7 Bedrooms | $2,779 |
| 8 Bedrooms | $2,918 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,190 | $262,894 | 0.45% | F |
| 3BR | $1,600 | $318,038 | 0.5% | F |
| 4BR | $1,980 | $361,268 | 0.55% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 77484 in Texas provides a critical insight into the investment potential for landlords and small-portfolio investors. To understand the gross yield, we need to consider both the Fair Market Rent (FMR) and the Zillow Observed Rent Index (ZORI).
Based on the data provided, the annualized 2BR FMR for ZIP 77484 is $1170 for FY 2024. The median home value in this area is $353,622. Using these figures, the implied gross yield when relying on Section 8 rental income is approximately 3.3%. This calculation is derived from dividing the annualized FMR by the median home value: ($1170 * 12) / $353,622 = 0.033 or 3.3%.
In contrast, the ZORI for a 2BR property in ZIP 77484 is $1,469. When annualized, this yields a gross income of $17,628 per year. Dividing this by the median home value gives an implied gross yield of about 5.0%, calculated as ($1,469 * 12) / $353,622 = 0.050 or 5.0%.
The difference between these two yields is significant, with the ZORI scenario providing nearly double the yield of the FMR scenario. However, it's important to consider the local rental market dynamics. With a renter density of 26.4%, there is a notable presence of renters in ZIP 77484, which supports the possibility of achieving higher rental rates outside of Section 8. Additionally, the N/A-day DOM suggests that rental listings may be moving quickly, indicating strong demand for rental properties in this area.
Given these factors, the ZORI-based gross yield of 5.0% is likely more reflective of the actual rental market conditions in ZIP 77484. While the Section 8 program offers stability and a guaranteed tenant, the lower gross yield of 3.3% does not fully capture the potential returns available to landlords who can attract market-rate tenants. Therefore, for investors looking to maximize their returns, focusing on properties that can command market rents is advisable.
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.