Section 8 Fair Market Rent (FMR) for ZIP 78240 - 2027

Investment Score for ZIP 78240

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	$1,220
1 Bedroom	$1,330
2 Bedrooms	$1,600
3 Bedrooms	$2,070
4 Bedrooms	$2,400
5 Bedrooms	$2,784
6 Bedrooms	$3,118
7 Bedrooms	$3,367
8 Bedrooms	$3,535

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
2BR	$1,600	$187,906	0.85%	C
3BR	$2,070	$262,096	0.79%	D
4BR	$2,400	$310,322	0.77%	D
5BR	$2,784	$400,979	0.69%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78240 (San Antonio, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78240 in San Antonio, TX, as of 2026, is set at $1590 for a two-bedroom unit. This figure represents 30.1% of the median household income in the area, which stands at $63,351. However, the actual rental market in 78240 is significantly higher than the FMR. The Zillow median price for a two-bedroom unit is $186,954, which translates to a monthly rent of approximately $1558 when considering a typical mortgage payment based on a 4.5% interest rate over 30 years. This implies that the actual market rent for a two-bedroom unit is likely to be around $1558, given the high price-to-FMR ratio of 9.8x. This discrepancy between FMR and actual rents creates significant constraints for voucher holders. They may struggle to find units that fall within the FMR limits, particularly for larger units such as three-bedroom ($2040) and four-bedroom ($2380) units, which are well above the FMR. Consequently, many voucher holders might be forced into smaller units or face difficulties securing housing altogether. #### Affordability & Renter Profile ZIP code 78240 has a population of 57,921, with a substantial 65.6% of residents being renters. This high percentage of renters indicates a strong demand for rental properties in the area. The occupancy rate of 87.9% further supports the notion that the rental market is relatively tight, with most available units being occupied. Given the median household income of $63,351, affordability is a critical issue for many residents, especially those relying on Section 8 vouchers. The high rent-to-income ratio suggests that the market is challenging for low-income households. With 30.1% of the median income allocated to a two-bedroom unit at FMR, it leaves little room for other expenses. This tight market condition means that there is a significant need for affordable housing options, but the supply is limited, making it difficult for renters to find suitable accommodation within their budget. #### Investor Angle From an investor perspective, the ZIP code 78240 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1590, but the actual market rent is closer to $1558. This means that landlords who accept Section 8 vouchers could potentially see a slight decrease in cash flow compared to market rates. However, the stability and guaranteed income from government-backed vouchers can be attractive for some investors. To determine the investment grade, we must consider factors such as the demand for rental properties, the percentage of renters, and the overall economic conditions of the area. Given the high renter percentage and tight market, there is a solid demand for rental units. However, the challenge lies in finding properties where the FMR covers the costs of ownership, including mortgage payments, property taxes, insurance, and maintenance. Assuming a typical mortgage payment of $1558 for a two-bedroom unit, property taxes of $150 per month, insurance of $100 per month, and maintenance costs of $100 per month, the total cost would be around $1908. This exceeds the FMR by $318, indicating that accepting Section 8 vouchers would result in a negative cash flow unless the investor can reduce costs or find properties below market value. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high FMR-to-market rent discrepancy, investors should focus on smaller units like one-bedroom apartments. The FMR for a one-bedroom unit is $1310, which is closer to the actual market rent. This would allow for better cash flow management and still meet the needs of many voucher holders. 2. **Target Low-Cost Properties**: Investors should seek out properties with lower acquisition costs or those that require minimal renovation. This strategy can help reduce the total cost of ownership and bring it closer to the FMR levels, thereby improving the potential for positive cash flow. 3. **Consider Property Management Services**: Due to the complexities involved in managing Section 8 properties, investors might benefit from outsourcing property management to professionals experienced in handling these types of units. This can mitigate the risks associated with tenant turnover and compliance issues. #### Bottom Line For Section 8-focused investors, the ZIP code 78240 presents a mixed picture. While there is a strong demand for rental properties, the high rent-to-income ratio and the tight market make it challenging to find properties that offer positive cash flow at FMR levels. Therefore, the recommendation for this ZIP code is to **Skip** unless investors can identify specific strategies to manage costs effectively or target smaller units where the FMR is closer to market rents. In conclusion, while the area shows promise due to its high rental demand, the financial realities suggest that it may not be the best choice for investors solely focused on Section 8 vouchers without additional considerations.

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.