Section 8 Fair Market Rent (FMR) for ZIP 77498 - 2027

Investment Score for ZIP 77498

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	$1,610
1 Bedroom	$1,640
2 Bedrooms	$1,950
3 Bedrooms	$2,630
4 Bedrooms	$3,260
5 Bedrooms	$3,782
6 Bedrooms	$4,236
7 Bedrooms	$4,575
8 Bedrooms	$4,804

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	$1,950	$218,820	0.89%	C
3BR	$2,630	$268,483	0.98%	C
4BR	$3,260	$362,436	0.9%	C
5BR	$3,782	$468,324	0.81%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 77498 (Sugar Land, TX) #### Section 8 Voucher Dynamics In ZIP code 77498, the Fair Market Rent (FMR) for a two-bedroom unit is set at $2100 per month for the year 2026. This figure represents 25.0% of the median household income in the area, which stands at $100,950. The FMR is designed to reflect the average rent that a tenant would pay for a standard unit in the market. However, it is important to note that the actual rents in Sugar Land can be significantly higher. For instance, the Zillow median price for a two-bedroom home is $220,537, which translates into a monthly rental cost that is approximately 8.8 times the FMR. This suggests that actual rents are much higher than the FMR, potentially creating a challenge for tenants using Section 8 vouchers. The voucher holders are constrained by the maximum allowable rent, which may limit their options in finding suitable housing in this competitive market. #### Affordability & Renter Profile The population of Sugar Land is 52,806, with 29.4% of residents being renters. Given the occupancy rate of 94.2%, it is clear that the market is relatively tight, indicating strong demand for rental properties. The median household income of $100,950 suggests that many residents have above-average financial stability, but the high actual rents relative to the FMR indicate that affordability remains a significant issue for lower-income renters. Specifically, the FMR for a two-bedroom unit is only $2100, while the actual median rent is likely much higher, given the price-to-FMR ratio of 8.8x. This implies that the market is not oversupplied; rather, it is a tight market where competition for affordable units is fierce. #### Investor Angle From an investor’s perspective, the ZIP code 77498 offers a mixed picture when considering cash flow at the FMR level. While the FMR for a two-bedroom unit is $2100, the actual market rent is expected to be much higher due to the price-to-FMR ratio. However, the high demand for rental properties means that there is a risk of vacancy if the rent is set too low. On the other hand, setting rents at the FMR level could result in positive cash flow, especially if the property management costs are kept under control. The investment grade for this ZIP code is likely to be moderate to high, given the strong demand and the high median household income. However, the tightness of the market and the high actual rents suggest that there may be limited opportunities for investors who are strictly focused on Section 8 vouchers. The FMR levels are significantly below the market rates, which could make it challenging to find tenants willing to pay the higher market rates while still qualifying for the lower FMR rates. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider focusing on smaller units such as one-bedroom apartments. The FMR for a one-bedroom unit is $1770, which is closer to the actual market rents for smaller units. This could provide a better balance between attracting tenants and maintaining positive cash flow. 2. **Target Lower-Income Renters**: Since 29.4% of the population are renters and the median household income is relatively high, targeting lower-income renters who qualify for Section 8 vouchers could be a viable strategy. However, this requires careful consideration of the property’s location and amenities to ensure it meets the needs of these tenants. 3. **Consider Mixed-Income Developments**: Developing properties that cater to both Section 8 voucher holders and market-rate renters could be a way to mitigate risks. By offering a mix of units at different price points, investors can ensure a steady stream of tenants and maintain positive cash flow. #### Bottom Line For investors focused specifically on Section 8 vouchers, the recommendation for ZIP code 77498 is to **Skip**. The high actual rents and the tight market conditions make it difficult to find properties that offer a good balance between attracting tenants and maintaining positive cash flow at the FMR levels. However, for investors willing to explore mixed-income developments or focus on smaller units, there may be opportunities to enter the market positively. Overall, the dynamics of the Sugar Land rental market suggest that strict Section 8 investments may not be the most profitable option.

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.