Section 8 Fair Market Rent (FMR) for ZIP 78526 - 2027

Investment Score for ZIP 78526

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	$1,040
2 Bedrooms	$1,230
3 Bedrooms	$1,640
4 Bedrooms	$1,770
5 Bedrooms	$2,053
6 Bedrooms	$2,299
7 Bedrooms	$2,483
8 Bedrooms	$2,607

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	$1,230	$139,457	0.88%	C
3BR	$1,640	$238,039	0.69%	D
4BR	$1,770	$316,958	0.56%	F
5BR	$2,053	$362,005	0.57%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78526 (Brownsville, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78526 in Brownsville, Texas, is set by HUD for 2026. The FMRs are as follows: - 0BR: $920 - 1BR: $1030 - 2BR: $1240 (which represents 21.1% of the median household income) - 3BR: $1670 - 4BR: $1750 To understand how these FMRs compare to actual rents, we need to consider the price-to-FMR ratio. For a 2BR unit, the Zillow median price is $135,934, which translates into a monthly rent of approximately $1049.53 when considering a typical mortgage payment (assuming a 30-year fixed-rate mortgage at 4.5%, with a 20% down payment). This is significantly higher than the FMR of $1240, indicating that actual rents are likely above the FMR levels. The constraints for voucher holders are evident in the disparity between the FMR and the actual rental prices. A voucher holder would find it challenging to secure a 2BR unit at the FMR rate of $1240, given the actual market rates are higher. This suggests that voucher holders may have limited options and could face difficulties finding affordable housing. #### Affordability & Renter Profile ZIP code 78526 has a population of 60,012, with 30.8% of households being renters. The occupancy rate is 94.0%, indicating a relatively tight rental market. Given the median household income of $70,565, the affordability of housing is a significant concern for many residents. The FMR for a 2BR unit is $1240, which is 21.1% of the median income. This implies that a substantial portion of the renter population may struggle to afford even the FMR level of rent, especially if they have other financial obligations. The tight market conditions suggest that there is a high demand for rental properties, but the supply might be insufficient to meet the needs of all residents, particularly those relying on Section 8 vouchers. The high occupancy rate also indicates that there is little vacancy, making it difficult for new units to enter the market without displacing existing tenants. #### Investor Angle From an investor's perspective, the ZIP code 78526 presents a mixed picture regarding cash flow and investment grade. The FMRs are lower than the actual market rates, which means that landlords who rely solely on Section 8 vouchers may experience lower cash flows compared to those who can charge market rates. However, the high occupancy rate and the presence of a significant number of renters indicate strong demand for rental properties. The price-to-FMR ratio for a 2BR unit is 9.1x, which is quite high. This suggests that the purchase price of a property is significantly higher than what can be charged under the FMR guidelines. For instance, a 2BR unit priced at $135,934 would generate a monthly rent of about $1049.53, which is still below the FMR of $1240. This discrepancy highlights the challenge for investors looking to achieve positive cash flow while adhering to FMR guidelines. Given the high purchase prices and the lower FMRs, the investment grade for this ZIP code is moderate to low for Section 8-focused investors. The primary risk lies in the ability to attract and retain tenants who are eligible for Section 8 vouchers, as the actual rental prices are higher than the FMRs. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as 0BR and 1BR apartments. These units have FMRs of $920 and $1030, respectively, which are closer to the actual market rates. This strategy can help mitigate the risk of negative cash flow and ensure a better match between the FMR and the actual rental prices. 2. **Consider Mixed-Income Developments**: To address the affordability issue and leverage the strong rental demand, investors might consider developing mixed-income housing projects. By including a mix of Section 8 units and market-rate units, landlords can balance their revenue streams and ensure a steady cash flow. This approach also helps in providing affordable housing options to a broader segment of the community. 3. **Engage with Local Authorities**: Investors should engage with local authorities and housing agencies to understand any potential subsidies or incentives available for Section 8-focused developments. These programs can help offset the lower rents and improve the overall financial viability of the investment. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 78526 is to **Skip**. The high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow while adhering to FMR guidelines. Additionally, the limited options for voucher holders and the higher actual rental prices suggest that the area is not well-suited for investments primarily targeting Section 8 tenants. Investors should consider other ZIP codes with more favorable FMR-to-market price ratios and less stringent occupancy rates.

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.