Section 8 Fair Market Rent (FMR) for ZIP 78251 - 2027

Investment Score for ZIP 78251

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: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,600	$180,132	0.89%	C
3BR	$2,070	$241,869	0.86%	C
4BR	$2,400	$301,361	0.8%	D
5BR	$2,784	$372,407	0.75%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78251 (San Antonio, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 78251, as set by HUD for 2026, are as follows: - 0BR: $1210 - 1BR: $1320 - 2BR: $1600 - 3BR: $2050 - 4BR: $2390 These FMRs represent the maximum rent that a household receiving a Section 8 voucher can pay. However, the actual rents in the area are significantly higher. For instance, the Zillow median price for a 2BR unit is $182,050, which translates to a monthly rental cost of approximately $1,517 when considering a typical mortgage payment. This is already above the FMR of $1,600 for a 2BR unit. The price-to-FMR ratio of 9.5x suggests that the actual rental costs are much higher than the FMRs, making it challenging for voucher holders to find affordable housing within their budget. #### Affordability & Renter Profile ZIP code 78251 has a population of 59,435, with 49.2% of residents being renters. The occupancy rate stands at 94.8%, indicating a relatively tight rental market where demand is high and supply is limited. Given the median household income of $78,958, the affordability of housing is a significant concern. A 2BR unit at the FMR of $1,600 represents 24.3% of the median income, which is a substantial portion but still manageable for many households. However, the actual rental costs being higher than the FMR suggest that the majority of renters in this area are likely paying more than what they might consider affordable. #### Investor Angle From an investor’s perspective, the ZIP code 78251 presents both opportunities and challenges. While the rental market is robust with high occupancy rates, the gap between actual rents and FMRs means that properties rented to Section 8 voucher holders will likely generate lower cash flows compared to market-rate rentals. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical operating expenses and mortgage payments. Assuming a property value of $182,050 for a 2BR unit, a mortgage payment at a 4% interest rate over 30 years would be around $870 per month. Adding typical operating expenses such as maintenance, insurance, and property taxes, which could total around $300-$400 per month, the total monthly expense would be approximately $1,170-$1,270. At an FMR of $1,600, the net cash flow would be $330-$430 per month, which is positive but relatively low. Given these dynamics, the investment grade for properties in ZIP 78251 would be moderate. The cash flow is positive, but the returns are limited due to the lower rent ceiling imposed by the FMR. Additionally, the high demand and limited supply suggest that there is potential for appreciation in property values, which could offset the lower rental income. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, smaller units (0BR and 1BR) are more likely to be rented out at or near the FMR. These units are less expensive to maintain and have lower mortgage payments, potentially leading to better cash flow. For example, a 1BR unit at $1,320 FMR could cover a mortgage payment of $650 and operating expenses of $300, leaving a net cash flow of $370 per month. 2. **Consider Mixed-Income Developments**: To maximize returns, investors might consider developing mixed-income properties where some units are rented to market-rate tenants and others to Section 8 voucher holders. This approach allows leveraging the higher market rents to subsidize the lower FMR rents, thereby improving overall profitability. 3. **Look for Undervalued Properties**: Investors should focus on finding undervalued properties that can be renovated and brought up to market standards without exceeding the FMR. This could involve purchasing older homes or apartments that are currently priced below the Zillow median but can be improved to command higher rents within the FMR limits. #### Bottom Line For Section 8-focused investors, ZIP code 78251 offers a moderate investment opportunity. The tight rental market and high occupancy rates indicate strong demand, but the gap between actual rents and FMRs means that cash flows will be lower compared to market-rate rentals. Therefore, the recommendation is to **Hold** investments in this ZIP code, focusing on smaller units and mixed-income developments to optimize returns. Investors should also be prepared to manage properties efficiently to keep operating costs low and ensure compliance with Section 8 requirements.

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.