Section 8 Fair Market Rent (FMR) for ZIP 77583 - 2027

Investment Score for ZIP 77583

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	$1,090
1 Bedroom	$1,270
2 Bedrooms	$1,400
3 Bedrooms	$1,900
4 Bedrooms	$2,340
5 Bedrooms	$2,714
6 Bedrooms	$3,040
7 Bedrooms	$3,283
8 Bedrooms	$3,447

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	$1,400	$208,558	0.67%	D
3BR	$1,900	$275,621	0.69%	D
4BR	$2,340	$328,143	0.71%	D
5BR	$2,714	$418,809	0.65%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 77583 (Iowa Colony, TX) #### Section 8 Voucher Dynamics In ZIP code 77583, the Fair Market Rent (FMR) for a two-bedroom unit is set at $1260 per month for 2026. This amount represents approximately 12.7% of the median household income in the area, which stands at $119,287. However, the actual rental market is significantly higher, with the Zillow median price for a two-bedroom home being $206,055. The price-to-FMR ratio is 13.6x, indicating that the actual rental prices are much higher than the FMR. For example, if we assume a typical rental yield of 1% for the Zillow median price, the monthly rent would be around $1717, which is well above the FMR of $1260. This means that tenants using Section 8 vouchers face significant constraints in finding suitable housing. The FMR is designed to cover the cost of rent for low-income households, but the actual rental prices in Iowa Colony far exceed these guidelines. Consequently, landlords who accept Section 8 vouchers might struggle to compete with those who do not, as the latter can charge higher rents. Additionally, the high disparity between FMR and actual rents could limit the number of properties available to voucher holders, potentially leading to a shortage of affordable housing options. #### Affordability & Renter Profile The population of Iowa Colony is 52,747, with only 9.8% of residents identified as renters. This indicates a relatively small rental market compared to the overall population. The occupancy rate is 89.9%, suggesting that the majority of homes are occupied, but there is still some vacancy. Given the high median household income and the low percentage of renters, it is likely that the typical renter in this area has a higher-than-average income. The median household income of $119,287 suggests that most residents can afford to purchase rather than rent, making the rental market tighter and more competitive. The affordability issue is further compounded by the high price-to-FMR ratio. With the average two-bedroom home priced at $206,055, the monthly rent derived from this price is approximately $1717, which is nearly 50% higher than the FMR. This makes it challenging for low-income households to find affordable housing, even with the assistance of Section 8 vouchers. The limited supply of rental units and the high demand for them, driven by the strong local economy, contribute to the tightness of the market. #### Investor Angle From an investor perspective, the ZIP code 77583 presents a mixed picture. While the rental market is robust, with high median home values and strong demand, the FMR levels are considerably lower than the actual rental prices. For instance, a two-bedroom unit with an FMR of $1260 would need to generate a monthly rental income of $1717 to break even based on the Zillow median price. This implies that investors relying solely on FMRs to set their rental rates may not achieve positive cash flow. However, investors who can attract tenants willing to pay market rates or those who can secure higher rents through other means (such as property upgrades or location advantages) may find the market attractive. The strong local economy and high median household income suggest that there is a substantial pool of potential renters who can afford higher rents. Therefore, while the FMR-based rental rates may not be sufficient for positive cash flow, the overall market conditions are favorable for investors who can navigate the higher rent landscape. #### Specific Actionable Insights 1. **Target Higher-Income Renters**: Given the high median household income and the limited number of renters, investors should focus on attracting higher-income renters who can afford market rates. This could involve upgrading properties to meet the expectations of these renters, such as adding amenities like granite countertops, stainless steel appliances, or modern finishes. For example, a two-bedroom home priced at $206,055 could command a rent of $1717 per month, which is well above the FMR of $1260. 2. **Consider Property Location**: Properties located in desirable areas with access to good schools, shopping centers, and recreational facilities may command higher rents. Investors should consider the location of their properties when setting rental rates. For instance, a property near highly-rated schools might be able to charge a premium over the FMR, even if it is not significantly upgraded. 3. **Explore Alternative Rental Programs**: Since the rental market is tight and the FMR is significantly below market rates, investors might want to explore alternative rental programs that offer higher subsidies or incentives. This could include programs targeted at specific demographics, such as military families or teachers, who often receive additional rental support. #### Bottom Line Given the high price-to-FMR ratio and the limited number of renters relative to the population, ZIP code 77583 is not an ideal market for Section 8-focused investors. The FMR levels are too low to ensure positive cash flow, and the tight rental market makes it difficult to find properties that can be rented at FMR rates. Therefore, the recommendation for investors focusing on Section 8 is to **skip** this ZIP code and look for markets where the FMR is closer to the actual rental prices, ensuring better cash flow and a more balanced rental market. For investors willing to target higher-income renters or explore alternative rental programs, the ZIP code could be considered for investment, but they must be prepared to set rental rates well above the FMR to achieve positive cash flow.

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.