Section 8 Fair Market Rent (FMR) for ZIP 78221 - 2027

Investment Score for ZIP 78221

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
2BR	$1,290	$128,863	1%	B
3BR	$1,670	$176,221	0.95%	C
4BR	$1,940	$232,628	0.83%	C
5BR	$2,250	$277,899	0.81%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78221 (San Antonio, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78221, as of 2026, is set at $1260 for a two-bedroom unit. This figure represents the maximum amount that a Section 8 voucher holder can pay towards rent. However, the actual rental market in this area tends to be higher. For instance, the Zillow median price for a two-bedroom property is $129,784, which translates into a monthly rental cost that is significantly above the FMR. The price-to-FMR ratio of 8.6x indicates that the average rental price is approximately 8.6 times the FMR for a two-bedroom unit. This suggests that many properties in this area are out of reach for Section 8 voucher holders unless landlords agree to accept the voucher amount as full payment. Given the constraints, voucher holders must find units that are priced below or at the FMR levels. In ZIP 78221, this means they would need to secure a two-bedroom unit for $1260 or less per month. This could be challenging given the high price-to-FMR ratio, indicating a significant gap between the FMR and the actual rental prices. #### Affordability & Renter Profile ZIP code 78221 has a population of 42,178, with 29.8% of residents being renters. The median household income is $63,811, which provides context on the financial capabilities of potential tenants. The occupancy rate stands at 87.6%, suggesting that the housing market is relatively tight, with most available units being occupied. A key affordability metric is the percentage of median income that the FMR represents. For a two-bedroom unit, the FMR of $1260 is 23.7% of the median household income. This implies that a significant portion of the population can afford the FMR rates, but the actual rental prices are much higher. The high price-to-FMR ratio indicates that the market is not particularly affordable for low-income renters, who make up a substantial part of the tenant base. #### Investor Angle From an investor perspective, the cash flow potential in ZIP 78221 at the FMR level is mixed. Given that the FMR for a two-bedroom unit is $1260, and the average rental price is $129,784 (which translates to a monthly rental cost of approximately $1081 based on typical mortgage payments), it is clear that the actual rental market is not aligned with the FMR. However, if an investor is willing to accept the FMR as full payment, there could still be opportunities for positive cash flow. Assuming a conservative estimate of $1081 in monthly rental income, an investor would need to ensure that their total expenses (including mortgage, maintenance, taxes, insurance, and other costs) do not exceed this amount. If the investor can manage their expenses effectively, they might achieve positive cash flow, but this would require a very efficient operation. The investment grade for this ZIP code would likely be considered moderate to low due to the high price-to-FMR ratio. Investors should carefully evaluate the local market dynamics and consider the potential for vacancy and the willingness of landlords to accept vouchers at the FMR rate. #### Specific Actionable Insights 1. **Focus on Units Below FMR:** Investors should focus on acquiring properties that are priced below the FMR levels. For example, a two-bedroom unit priced at $1260 or less would be more attractive to Section 8 voucher holders and could ensure higher occupancy rates. 2. **Negotiate with Landlords:** Given the high price-to-FMR ratio, negotiating with existing landlords to accept vouchers at the FMR rate could create opportunities for positive cash flow. This would involve understanding the local market and potentially offering incentives to landlords to participate in the program. 3. **Consider Smaller Units:** Since the FMR for smaller units (0BR and 1BR) is lower ($950 and $1040 respectively), focusing on these types of units could provide better alignment with the voucher system and potentially higher occupancy rates. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 78221 is to **Hold** or **Skip**. The high price-to-FMR ratio and the tight rental market suggest that it may be difficult to find properties that align well with the FMR levels. While there are opportunities for positive cash flow, they are limited and would require careful management and negotiation skills. Investors should proceed with caution and consider areas with a lower price-to-FMR ratio for better alignment with the Section 8 program.

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.