Section 8 Fair Market Rent (FMR) for ZIP 78550 - 2027

Investment Score for ZIP 78550

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	$840
1 Bedroom	$900
2 Bedrooms	$1,060
3 Bedrooms	$1,420
4 Bedrooms	$1,520
5 Bedrooms	$1,763
6 Bedrooms	$1,975
7 Bedrooms	$2,133
8 Bedrooms	$2,240

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	$1,060	$145,181	0.73%	D
3BR	$1,420	$206,866	0.69%	D
4BR	$1,520	$279,147	0.54%	F
5BR	$1,763	$366,642	0.48%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78550 (Harlingen, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 78550, as set by HUD for 2026, provide insight into the rental dynamics in Harlingen, TX. For a two-bedroom unit, the FMR is $1070, which represents 26.2% of the median household income of $49,007. This indicates that the rent for a two-bedroom unit is relatively affordable compared to the average income in the area. However, it is important to note that the actual rents can be significantly higher. The Zillow median price for a two-bedroom property is $141,293, which translates to a price-to-FMR ratio of 11.0x. This suggests that landlords might charge rents above the FMR, making it challenging for Section 8 voucher holders to find suitable housing. Specifically, a voucher holder would likely struggle to find a three-bedroom unit at $1440 or a four-bedroom unit at $1510, given the high price-to-FMR ratio. #### Affordability & Renter Profile With a population of 53,335 and a renter percentage of 49.5%, Harlingen has a significant number of renters. The occupancy rate stands at 87.8%, indicating that the rental market is moderately tight but not overly saturated. Given the median household income of $49,007, many residents rely on affordable housing options. The FMR for a two-bedroom unit being $1070 is a critical benchmark for affordability. However, the high price-to-FMR ratio suggests that the market is not entirely aligned with affordability standards, especially for those who depend on government assistance like Section 8 vouchers. The majority of renters in this area are likely to be low-income families, individuals, and seniors who need affordable housing solutions. #### Investor Angle From an investor perspective, the ZIP code 78550 offers both opportunities and challenges. The FMR for a two-bedroom unit is $1070, which is significantly lower than the Zillow median price of $141,293. This means that if an investor purchases a property at the median price, they would need to generate a substantial amount of rental income to cover mortgage payments and other expenses. The price-to-FMR ratio of 11.0x implies that properties are overpriced relative to their rental value. For an investor to achieve cash flow positivity, they would need to ensure that the rental income exceeds the total costs, including mortgage, maintenance, and taxes. Given the high price-to-FMR ratio, achieving cash flow positivity solely based on FMR rates would be difficult unless the investor can secure tenants willing to pay above FMR rates. In terms of investment grade, the high price-to-FMR ratio and the tight rental market suggest that while there is demand for rental units, the returns on investment might be lower due to the mismatch between purchase prices and rental yields. Investors should carefully consider the potential for rent increases and the stability of the local economy before committing to investments in this ZIP code. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom or studio apartments. These units have lower FMRs ($880 for 1BR and $790 for 0BR), which could make them more financially viable. By targeting these smaller units, investors can potentially achieve better cash flow and align their rental offerings with the needs of Section 8 voucher holders. 2. **Consider Renovation Projects**: Investors might find it advantageous to look for properties that require renovation. While the median home price is high, older or less desirable homes might be available at a discount. By renovating these properties to meet modern standards, investors can increase their rental income and still offer affordable housing options. Additionally, renovations can help attract tenants willing to pay slightly above FMR rates, improving overall profitability. 3. **Evaluate Long-Term Potential**: Despite the high price-to-FMR ratio, the long-term potential of the area should be considered. If there is a growing population or economic development in Harlingen, the rental market could become even tighter, leading to higher rental incomes. Investors should conduct thorough research on future developments and demographic trends to assess whether the current high prices will be justified by increased demand in the coming years. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 78550 is to **Skip**. The high price-to-FMR ratio makes it challenging to achieve cash flow positivity when relying solely on FMR rates. Additionally, the tight rental market and high property prices suggest that the returns on investment might be lower compared to areas with a more favorable price-to-rent ratio. Investors should explore other ZIP codes with better alignment between purchase prices and rental yields to maximize their financial returns and provide affordable housing options effectively.

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.