Section 8 Fair Market Rent (FMR) for ZIP 78201 - 2027

Investment Score for ZIP 78201

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	$980
1 Bedroom	$1,070
2 Bedrooms	$1,290
3 Bedrooms	$1,670
4 Bedrooms	$1,940
5 Bedrooms	$2,250
6 Bedrooms	$2,520
7 Bedrooms	$2,722
8 Bedrooms	$2,858

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	$1,070	$89,208	1.2%	B
2BR	$1,290	$145,204	0.89%	C
3BR	$1,670	$186,520	0.9%	C
4BR	$1,940	$252,362	0.77%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78201 (San Antonio, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78201 is set by HUD to ensure that low-income families can afford housing. For a two-bedroom unit, the FMR in 2026 is $1280, which represents 32.6% of the median household income of $47,121. However, the actual rent prices in this area are significantly higher. The Zillow median price for a two-bedroom rental property is $148,263, indicating a price-to-FMR ratio of 9.7x. This means that landlords who want to participate in the Section 8 program must accept rents that are far below market rates, potentially leading to financial strain or reduced profit margins. #### Affordability & Renter Profile ZIP code 78201 has a population of 41,981, with 51.4% of residents being renters. The occupancy rate stands at 88.9%, suggesting a relatively tight rental market. Given that over half of the residents are renters and the median household income is $47,121, it is likely that many of these renters rely on assistance programs like Section 8 to make ends meet. The high occupancy rate indicates that there is a strong demand for rental properties, but the affordability gap between FMR and actual rents is substantial. This makes it challenging for voucher holders to find suitable housing, as many landlords may prefer higher-paying tenants due to the lower rents associated with Section 8 vouchers. #### Investor Angle From an investor perspective, participating in the Section 8 program in ZIP code 78201 could be financially viable if the goal is to provide affordable housing while maintaining a steady income stream. However, the cash flow would be significantly lower compared to market-rate rentals. For example, a two-bedroom unit with a Zillow median price of $148,263 would have a monthly mortgage payment of approximately $760 based on a 30-year fixed-rate mortgage at 4.5%. Adding typical operating expenses such as property taxes, insurance, maintenance, and utilities, the total cost per month might exceed $1280, making it difficult to generate positive cash flow at the FMR rate. Despite these challenges, the investment grade for this ZIP code could still be considered moderate to good, given the high demand for rental units and the significant percentage of renters. However, investors should carefully evaluate their costs and consider the potential for vacancy or tenant turnover, which can impact profitability. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Investors should focus on acquiring properties where the rent is closer to the FMR. For instance, a one-bedroom unit renting for $1060 would be more feasible for generating positive cash flow under the Section 8 program. This strategy helps mitigate the risk of negative cash flow and ensures that the property remains attractive to voucher holders. 2. **Consider Property Location and Condition**: In ZIP code 78201, the location and condition of the property play a crucial role in attracting tenants. Properties in desirable neighborhoods with modern amenities and well-maintained conditions are more likely to be occupied by Section 8 tenants. Additionally, investing in renovations that improve the quality of the property can help justify slightly higher rents while still remaining within FMR guidelines. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can provide valuable insights into the demand for Section 8 units and the likelihood of securing tenants. These authorities often have waiting lists and can prioritize properties that meet certain criteria, such as being in good repair and offering reasonable rents. #### Bottom Line Given the high occupancy rate and significant percentage of renters in ZIP code 78201, the recommendation for Section 8-focused investors is to **Hold**. While the market presents challenges in terms of affordability and cash flow, the strong demand for rental properties suggests that there is value in maintaining existing investments. However, new investors should proceed with caution and carefully evaluate the financials of each property before committing to the Section 8 program. Targeting lower-rent properties and engaging with local housing authorities can help maximize the chances of success in this market.

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.