Section 8 Fair Market Rent (FMR) for ZIP 78028 - 2027

Investment Score for ZIP 78028

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	$880
1 Bedroom	$1,030
2 Bedrooms	$1,160
3 Bedrooms	$1,520
4 Bedrooms	$1,530
5 Bedrooms	$1,775
6 Bedrooms	$1,988
7 Bedrooms	$2,147
8 Bedrooms	$2,254

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
1BR	$1,030	$215,654	0.48%	F
2BR	$1,160	$257,709	0.45%	F
3BR	$1,520	$373,913	0.41%	F
4BR	$1,530	$566,300	0.27%	F
5BR	$1,775	$864,424	0.21%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78028 (Kerrville, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78028 in Kerrville, Texas, is set by HUD for 2026. For a two-bedroom unit, the FMR is $1,130, which represents approximately 20.2% of the median household income of $66,991. This indicates that a significant portion of the population can afford to pay the rent out-of-pocket without assistance. However, for those relying on Section 8 vouchers, the FMR serves as a cap on what they can be reimbursed for their housing costs. Actual rental rates in the area can be significantly higher than the FMR. The Zillow median price for a two-bedroom home in ZIP 78028 is $255,395, which translates to a price-to-FMR ratio of 18.8x. This suggests that the actual rental market is much more expensive than the FMR, meaning that voucher holders may face challenges finding affordable housing. Landlords who accept Section 8 vouchers must ensure that their rental rates do not exceed the FMR, which could limit their ability to compete with non-voucher properties in terms of pricing. #### Affordability & Renter Profile In ZIP code 78028, 32.9% of the population are renters, indicating a substantial demand for rental properties. With a population of 41,206, this translates to approximately 13,550 renters. Given that the occupancy rate is 90.7%, it implies that there is a relatively tight market for rental units, with little room for oversupply. The median household income of $66,991 suggests that the majority of residents have moderate incomes. For those who rely on Section 8 vouchers, the income level is likely lower, as the program targets low-income families. The affordability of housing is a critical issue, especially considering the high price-to-FMR ratio. This means that many renters, particularly those with Section 8 vouchers, may struggle to find suitable housing within their budget. #### Investor Angle From an investor perspective, the ZIP code 78028 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1,130, but the actual rental market is much more expensive, with a median price of $255,395. This high price-to-FMR ratio (18.8x) suggests that the market is not aligned with the FMR, making it difficult for investors to achieve positive cash flow if they strictly adhere to FMR guidelines. However, there are still potential avenues for investors to explore. If an investor can secure a property below the median price, they might be able to offer it at a slightly higher rate than the FMR while still attracting tenants. Additionally, the high occupancy rate (90.7%) indicates a strong demand for rental properties, which could support higher rental prices. Investment grade in this market would depend on the specific property and its location. Properties that are well-maintained and located in desirable areas might attract higher-paying tenants, whereas properties that are less desirable or require significant renovations might struggle to meet FMR guidelines. #### Specific Actionable Insights 1. **Target Lower-Priced Properties**: Investors should focus on acquiring properties that are priced below the median of $255,395. This will allow them to potentially charge slightly above the FMR of $1,130 while still being competitive in the rental market. For example, a property priced at $200,000 could be rented at $1,200 per month, providing a reasonable profit margin while staying close to the FMR. 2. **Consider Smaller Units**: Given the high price-to-FMR ratio, smaller units like one-bedroom apartments may be more attractive to voucher holders. The FMR for a one-bedroom unit is $980, which is still a significant portion of the median income. By focusing on one-bedroom units, investors can cater to a segment of the market that is more likely to be able to afford the rent with a voucher. 3. **Enhance Property Value**: Improving the quality and amenities of rental properties can help justify higher rental rates. For instance, adding energy-efficient appliances, modernizing the kitchen and bathrooms, or offering additional storage space can make a property more appealing to tenants willing to pay above the FMR. These improvements can also increase the resale value of the property, providing additional benefits to investors. #### Bottom Line For Section 8-focused investors, the ZIP code 78028 presents a challenging environment due to the high price-to-FMR ratio. While there is a strong demand for rental properties, the limited supply and high prices make it difficult to achieve positive cash flow strictly adhering to FMR guidelines. Therefore, the recommendation for this ZIP code is to **Skip** unless investors can find properties priced significantly below the median and are willing to enhance their value through renovations and upgrades. In summary, the tight rental market and high property prices in ZIP 78028 make it less favorable for investors looking to capitalize on Section 8 vouchers. However, strategic acquisitions and improvements could still yield positive returns, albeit with a higher risk profile.

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.