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 | $990 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,300 |
| 3 Bedrooms | $1,670 |
| 4 Bedrooms | $1,940 |
| 5 Bedrooms | $2,250 |
| 6 Bedrooms | $2,520 |
| 7 Bedrooms | $2,722 |
| 8 Bedrooms | $2,858 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,080 | $90,379 | 1.19% | B |
| 2BR | $1,300 | $161,663 | 0.8% | C |
| 3BR | $1,670 | $226,300 | 0.74% | D |
| 4BR | $1,940 | $270,747 | 0.72% | D |
| 5BR | $2,250 | $390,795 | 0.58% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 78217 in San Antonio, TX, reveals some interesting insights when comparing the Fair Market Rent (FMR) and market rent figures against the median home value.
First, let's consider the annualized 2BR FMR of $1420 for fiscal year 2024. This translates to an annual rental income of $17,040. Given the median home value of $225,700, the implied gross yield for this scenario is approximately 7.55%. This calculation is derived by dividing the annual rental income by the median home value: $17,040 / $225,700 = 0.0755 or 7.55%.
Next, we'll examine the market rent figure, which stands at $1,142 per month, known as the ZORI (Zillow Observed Rent Index). The annual rental income based on ZORI would be $13,704. When compared to the median home value, this yields an implied gross yield of about 6.07%. This is calculated by dividing the annual ZORI rental income by the median home value: $13,704 / $225,700 = 0.0607 or 6.07%.
The difference between these two gross yields highlights the potential impact of participating in the Section 8 program versus renting at market rates. At 7.55%, the FMR-based gross yield is significantly higher than the market rate yield of 6.07%. However, the choice between these options should also consider the local rental market conditions.
ZIP 78217 has a renter density of 55.3%, indicating a strong demand for rental properties. Despite this high density, the lack of available data on days on market (DOM) suggests that it might take longer to find tenants willing to pay market rates. In contrast, the FMR-based yield assumes a steady stream of tenants through the Section 8 program, which could provide greater stability and predictability.
Given the strong rental demand and the potential challenges in achieving market rents consistently, the FMR-based gross yield of 7.55% appears more realistic for landlords and small-portfolio investors considering participation in the Section 8 program. This higher gross yield can offer better financial returns and security in a competitive rental market environment.
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.