Section 8 Fair Market Rent (FMR) for ZIP 78154 - 2027

Investment Score for ZIP 78154

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	$1,400
1 Bedroom	$1,520
2 Bedrooms	$1,830
3 Bedrooms	$2,370
4 Bedrooms	$2,750
5 Bedrooms	$3,190
6 Bedrooms	$3,573
7 Bedrooms	$3,859
8 Bedrooms	$4,052

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	$1,830	$176,004	1.04%	B
3BR	$2,370	$276,493	0.86%	C
4BR	$2,750	$356,193	0.77%	D
5BR	$3,190	$449,677	0.71%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78154 (Schertz, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78154 is set by HUD for 2026 as follows: - 0BR: $1370 - 1BR: $1500 - 2BR: $1820 (which represents 21.7% of the median household income) - 3BR: $2330 - 4BR: $2720 To understand how these figures compare to actual rents, we need to consider the price-to-FMR ratio. For a two-bedroom unit, Zillow reports a median home value of $177,402, which translates into a rental cost that is approximately 8.1 times the FMR. This means that the actual rent for a 2BR property is likely around $14,702 annually ($1820 x 8.1), significantly higher than the FMR. Given this high ratio, there are several constraints for voucher holders: - They will struggle to find units that accept their vouchers, as landlords might prefer higher-paying tenants. - The voucher amount may not cover the full rent, requiring tenants to pay the difference out-of-pocket. - There could be a limited supply of affordable units, making it difficult for voucher holders to secure housing. #### Affordability & Renter Profile In Schertz, TX, the population stands at 41,907, with 27.6% of residents being renters. The occupancy rate is 95.3%, indicating a robust demand for housing. Given the median household income of $100,572, the affordability of a 2BR unit at $1820 per month is relatively manageable, as it constitutes only 21.7% of the median income. However, this does not account for other living expenses, such as utilities, food, and transportation. The tight market conditions suggest that renters in this area are likely to be middle-class individuals who can afford the higher rents. The high price-to-FMR ratio also implies that the rental market is competitive, with many units priced well above the FMR. This makes it challenging for low-income renters to find affordable housing, especially those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 78154 presents both opportunities and challenges. The FMR for a 2BR unit is $1820, but the actual rent is likely much higher due to the 8.1x price-to-FMR ratio. This means that investors who can secure properties at or near the FMR would likely see positive cash flow, as they could potentially charge market rates. However, the challenge lies in finding properties willing to accept Section 8 vouchers. Given the high rent-to-income ratio, landlords might be hesitant to participate in the program. To determine the investment grade, we must consider factors like vacancy rates, maintenance costs, and the potential for long-term appreciation. With a 95.3% occupancy rate, the risk of vacancy is low, but the competition for tenants means that landlords must offer attractive units to attract Section 8 participants. #### Specific Actionable Insights 1. **Target Lower-Rent Units**: Investors should focus on acquiring properties that are priced closer to the FMR. For instance, a 2BR unit at $1820 per month would be ideal for attracting Section 8 tenants. This strategy would ensure that the rent is affordable for voucher holders while still providing a reasonable return on investment. 2. **Offer Incentives to Landlords**: Given the high price-to-FMR ratio, landlords may require additional incentives to participate in the Section 8 program. Investors could consider offering subsidies or guarantees to landlords to offset the perceived risks associated with accepting vouchers. 3. **Consider Multi-Family Properties**: Multi-family properties often have lower vacancy rates and can provide economies of scale. Investing in a multi-family property with multiple units priced at or below the FMR could help mitigate the risk of vacancy and ensure steady cash flow. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 78154 is to **Hold**. While there are significant challenges in finding properties that accept vouchers, the strong demand for housing and the high median income make this a viable market. However, investors should carefully select properties that are priced close to the FMR and consider strategies to incentivize landlords to participate in the program. The tight market conditions suggest that there is room for growth, but the competition for tenants means that investors must be strategic in their approach.

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.