Section 8 Fair Market Rent (FMR) for ZIP 78213 - 2027

Investment Score for ZIP 78213

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	$1,080
1 Bedroom	$1,180
2 Bedrooms	$1,420
3 Bedrooms	$1,840
4 Bedrooms	$2,130
5 Bedrooms	$2,471
6 Bedrooms	$2,768
7 Bedrooms	$2,989
8 Bedrooms	$3,138

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,180	$107,806	1.09%	B
2BR	$1,420	$157,714	0.9%	C
3BR	$1,840	$202,915	0.91%	C
4BR	$2,130	$372,888	0.57%	F
5BR	$2,471	$591,295	0.42%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78213 (Castle Hills, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78213 is set by HUD and serves as a benchmark for determining the maximum rent that can be charged to tenants using Section 8 vouchers. For 2026, the FMRs are as follows: - 0BR: $1080 - 1BR: $1180 - 2BR: $1430 - 3BR: $1830 - 4BR: $2140 These figures represent the maximum allowable rent for units of each size under the Section 8 program. However, it is important to understand how these FMRs compare to actual rental rates in the area. According to Zillow, the median price for a 2BR property in this ZIP code is $159,778. This translates into a price-to-FMR ratio of 9.3x, indicating that the actual purchase price of properties is significantly higher than the FMRs. For voucher holders, this means that they will likely face constraints in finding suitable housing. The FMRs are lower than what landlords might charge based on market conditions, making it difficult for voucher holders to secure housing without facing rent caps. Additionally, the occupancy rate of 89.6% suggests that there is limited vacancy, which could exacerbate the issue of finding affordable housing for voucher recipients. #### Affordability & Renter Profile ZIP code 78213 has a population of 40,526, with 51.2% of residents being renters. This indicates a significant demand for rental housing in the area. Given the median household income of $55,884, the affordability of housing is a critical concern. The FMR for a 2BR unit is $1430, which represents 30.7% of the median income. This is within the recommended threshold of 30% for housing affordability, but the actual market rents are likely higher due to the high price-to-FMR ratio. The high percentage of renters and the relatively low median income suggest that many residents are price-sensitive and may struggle to find affordable housing options. The tight market, with an occupancy rate of 89.6%, implies that there is little room for new entrants, and competition among renters is likely intense. This makes it challenging for those relying solely on Section 8 vouchers to find housing that fits their budget. #### Investor Angle From an investor perspective, the ZIP code 78213 presents both opportunities and challenges. The FMRs provide a baseline for rental pricing, but the actual market rents are much higher. For instance, the median price for a 2BR property is $159,778, which would typically command a rent much higher than the FMR of $1430. The price-to-FMR ratio of 9.3x suggests that investors who purchase properties at market value would need to charge rents well above the FMR to achieve positive cash flow. However, if investors focus on acquiring properties at or near the FMR levels, they could potentially generate positive cash flow while serving the needs of Section 8 voucher holders. This strategy would require careful consideration of acquisition costs and operating expenses to ensure profitability. Given the high demand for rental housing and the limited supply, investors who can offer competitive rents within the FMR guidelines could attract a steady stream of tenants. #### Specific Actionable Insights 1. **Target Properties Below Market Value**: Investors should aim to acquire properties at or below the FMR levels. For example, a 2BR unit with an FMR of $1430 would need to be purchased for around $13,000-$14,000 per unit to break even at the FMR. Given the median price of $159,778, this would mean targeting properties priced at approximately $15,000-$16,000 or less. This approach would help ensure positive cash flow while remaining within the Section 8 voucher limits. 2. **Focus on Smaller Units**: Given the high price-to-FMR ratio, smaller units such as 0BR and 1BR might be more feasible for investors looking to operate within the FMR guidelines. These units have FMRs of $1080 and $1180 respectively, which are lower than the median price for a 2BR unit. By focusing on these smaller units, investors can better align their rental income with the FMRs and still serve the local rental market. 3. **Consider Renovation Projects**: Some older properties might be available at prices closer to the FMRs. Investors could consider purchasing these properties and renovating them to meet modern standards while keeping the overall cost within the FMR range. This strategy would allow them to offer competitive rents and attract Section 8 voucher holders. #### Bottom Line For Section 8-focused investors, the ZIP code 78213 presents a mixed picture. While the high demand for rental housing and limited vacancy make it an attractive market, the significant gap between FMRs and actual market rents poses challenges. To succeed in this market, investors must target properties at or below the FMR levels and consider smaller units or renovation projects to maintain affordability. In summary, the recommendation for this ZIP code is **Hold**. Investors should proceed cautiously and carefully evaluate potential acquisitions to ensure they can operate within the FMR guidelines while generating positive cash flow.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.