Location: San Antonio-New Braunfels, TX | Metro: San Antonio-New Braunfels, 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 | $1,060 |
| 2 Bedrooms | $1,280 |
| 3 Bedrooms | $1,660 |
| 4 Bedrooms | $1,920 |
| 5 Bedrooms | $2,227 |
| 6 Bedrooms | $2,494 |
| 7 Bedrooms | $2,694 |
| 8 Bedrooms | $2,829 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,660 | $442,543 | 0.38% | F |
| 4BR | $1,920 | $553,419 | 0.35% | F |
| 5BR | $2,227 | $642,460 | 0.35% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,470 for ZIP 78121 can cover the mortgage on a home valued at $499,965. To address this, let's consider the typical mortgage payment for a home of this value. Assuming a 20% down payment and a 30-year fixed-rate mortgage at a current interest rate of around 5%, the monthly mortgage payment would be approximately $2,300. Thus, the FMR of $1,470 falls short by roughly $830. However, it's important to note that this calculation does not take into account other potential sources of income such as property taxes or utility reimbursements.
The investor might also doubt if there is sufficient rental demand at 13.1%. According to recent data, the rental vacancy rate in ZIP 78121 is around 19.0%, which suggests a moderate level of demand. A vacancy rate above 10% generally indicates that there are more available units than tenants seeking them, but the 13.1% rental demand figure still points to a significant portion of the population being renters. This means there is a reasonable pool of potential tenants, though competition among landlords could be fierce.
Another concern is whether vouchers will keep pace with market rents of $1,192. Based on the latest figures, the average Section 8 voucher payment in ZIP 78121 is set at $1,192. While this matches the market rent exactly, it's crucial to recognize that these payments represent the 40th percentile rate in the area. This implies that many properties may have higher rents, which could limit the number of units eligible for Section 8 vouchers. Landlords should carefully evaluate their properties' rent levels to ensure they align with the voucher payment standards.
In conclusion, while the FMR of $1,470 does not fully cover the mortgage on a $499,965 home, there are other financial considerations that can help bridge the gap. The rental demand at 13.1% is substantial, although the high vacancy rate indicates some competition. Lastly, the voucher payment standard matches the market rent, but landlords must ensure their rents do not exceed the voucher limits to remain competitive and viable 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.