Section 8 Fair Market Rent (FMR) for ZIP 78207 - 2027

Investment Score for ZIP 78207

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	$820
1 Bedroom	$890
2 Bedrooms	$1,070
3 Bedrooms	$1,380
4 Bedrooms	$1,610
5 Bedrooms	$1,868
6 Bedrooms	$2,092
7 Bedrooms	$2,259
8 Bedrooms	$2,372

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	$890	$78,413	1.14%	B
2BR	$1,070	$97,583	1.1%	B
3BR	$1,380	$124,016	1.11%	B
4BR	$1,610	$154,247	1.04%	B

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78207 (San Antonio, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78207 is set by HUD for 2026. For a two-bedroom unit, the FMR is $1060, which represents 39.2% of the median household income of $32,472. This suggests that voucher holders have limited flexibility when it comes to housing costs. The actual rent for a two-bedroom unit in this area is likely higher, as evidenced by the Zillow median price for a two-bedroom home being $96,987. However, the Zillow median price reflects home values rather than rental rates, so we need to focus on the FMR to understand the dynamics of rental costs for voucher holders. Given the FMRs, voucher holders can only afford units priced up to these levels. For example, a three-bedroom unit at $1360 would be out of reach for many voucher recipients, who would be constrained by the $1060 limit for a two-bedroom unit. This creates a significant challenge for voucher holders seeking larger living spaces. #### Affordability & Renter Profile ZIP code 78207 has a high percentage of renters at 59.7%, indicating a strong demand for rental properties. The occupancy rate of 88.9% further supports this, suggesting that the market is relatively tight. With a median household income of $32,472, the majority of residents are likely low-income families or individuals who rely heavily on affordable housing options. The fact that 2BR units cost $1060 (FMR) but are valued at $96,987 (Zillow median price) implies that the rental market is significantly more expensive than the ownership market, making rentals less affordable overall. The high rent-to-income ratio (7.6x for 2BR units) indicates that the rental market is not aligned with the income levels of the residents. This mismatch could lead to financial strain for tenants, especially those who do not qualify for vouchers or other forms of assistance. #### Investor Angle From an investor perspective, the key question is whether the ZIP code offers positive cash flow at the FMR levels. To determine this, we need to consider the typical expenses associated with owning and renting out a property. These include mortgage payments, property taxes, insurance, maintenance, and utilities. Given the FMR for a 2BR unit is $1060, an investor must ensure that their total monthly expenses do not exceed this amount to maintain profitability. Property taxes in Bexar County average around 1.75% of the home value. Using the Zillow median price of $96,987, the annual tax would be approximately $1,697, or $141 per month. Assuming a mortgage rate of 4.5% and a loan-to-value ratio of 80%, the monthly mortgage payment for a 2BR unit would be roughly $480. Adding typical insurance costs ($100 per month), maintenance ($100 per month), and utilities ($50 per month), the total monthly expenses would sum up to about $871. This leaves a small margin of $189 per month for profit, assuming no vacancy periods and full rent collection. Given the tight margins, the investment grade for this ZIP code would be considered moderate to low. While there is demand for rental properties, the affordability gap between FMR and actual rents means that investors must carefully manage their costs to remain profitable. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should prioritize smaller units such as 0BR and 1BR apartments, as these are more likely to be rented by voucher holders. The FMR for a 1BR unit is $870, which is closer to the median household income, making it a more viable option for both tenants and landlords. 2. **Consider Location-Specific Amenities**: Given the high rent-to-income ratio, adding amenities like laundry facilities, parking, and security features can help attract tenants willing to pay slightly above the FMR. This can provide a buffer against potential vacancies and increase the likelihood of full rent collection. 3. **Monitor Local Rental Trends**: Keep an eye on local rental trends and adjust pricing accordingly. If the rental market continues to tighten, it may become necessary to offer competitive incentives to attract tenants, such as reduced application fees or first-month rent discounts. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 78207 is to **Hold**. While the market presents opportunities due to high demand and a significant portion of renters, the tight margins and the high rent-to-income ratio make it challenging to achieve substantial profits. Investors should focus on managing costs effectively and potentially targeting smaller units where the FMR aligns more closely with tenant affordability. However, given the financial constraints, it may be prudent to wait for more favorable conditions before making new investments in this area.

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.