Section 8 Fair Market Rent (FMR) for ZIP 78586 - 2027

Investment Score for ZIP 78586

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	$800
1 Bedroom	$860
2 Bedrooms	$1,010
3 Bedrooms	$1,370
4 Bedrooms	$1,470
5 Bedrooms	$1,705
6 Bedrooms	$1,910
7 Bedrooms	$2,063
8 Bedrooms	$2,166

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	$1,010	$126,698	0.8%	D
3BR	$1,370	$201,569	0.68%	D
4BR	$1,470	$278,329	0.53%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78586 (San Benito, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 78586, as of 2026, indicate that a two-bedroom unit should rent for $990 per month. However, the actual rental market is significantly higher, with Zillow reporting a median price of $126,676 for a two-bedroom property. This translates into a price-to-FMR ratio of 10.7x, meaning that the median home price is over ten times the monthly rent for a comparable unit. For voucher holders, this presents a significant constraint, as they would only be able to cover a fraction of the actual cost of renting a typical two-bedroom unit. The FMR for a three-bedroom unit is $1340, which is still below the median home price, suggesting that voucher holders might struggle to find affordable housing options in the area. #### Affordability & Renter Profile In ZIP code 78586, 25.8% of the population are renters, indicating a moderate demand for rental properties. With a median household income of $45,575, the affordability of housing is a critical issue. A two-bedroom unit at the FMR of $990 represents 26.1% of the median income, which is a substantial portion but still within reach for some households. However, given the high price-to-FMR ratio, it is likely that many renters are paying much more than the FMR, especially if they are not using Section 8 vouchers. The occupancy rate of 91.0% suggests that the rental market is relatively tight, with few vacant units available. This could make it challenging for low-income families to secure housing without assistance. #### Investor Angle From an investor perspective, the ZIP code 78586 offers a mixed picture. At the FMR levels, the cash flow potential for rental properties is positive, but the actual rental prices are much higher. For instance, a two-bedroom unit priced at $126,676 would generate a monthly rent of approximately $1055 based on the median price, which is above the FMR of $990. However, this higher rent may not be sustainable for all tenants, particularly those relying on Section 8 vouchers. The investment grade for this ZIP code would be considered medium to low due to the high price-to-FMR ratio and the limited number of voucher holders who can afford the actual rents. Investors focusing on Section 8 vouchers would need to ensure their properties are priced competitively within the FMR range to attract eligible tenants. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Given the high price-to-FMR ratio, investors should focus on acquiring or developing units that are priced below the FMR. For example, a two-bedroom unit priced at $990 or less would be more attractive to voucher holders and would have a better chance of being occupied. This strategy would help mitigate the risk of vacancy and ensure steady cash flow. 2. **Target Smaller Units**: Since the FMR for smaller units (like one-bedroom) is lower ($820), targeting these units could be a more viable option for investors looking to cater to Section 8 voucher holders. This would also align with the fact that the median income in the area is relatively low, making smaller units more affordable for the average renter. 3. **Consider Location and Amenities**: While the overall rental market is tight, certain areas within San Benito might offer more affordable options. Additionally, offering amenities such as utilities included or a short commute to employment centers could make properties more attractive to voucher holders and other low-income renters. #### Bottom Line For Section 8-focused investors, the ZIP code 78586 presents a challenging environment due to the high price-to-FMR ratio and limited number of voucher holders who can afford the actual rents. The recommendation is to **Skip** this ZIP code unless investors can acquire properties at or below the FMR levels. If they can secure units priced at $990 or less for a two-bedroom, then there might be a **Hold** recommendation, but this would require careful consideration of the local rental dynamics and the ability to compete with higher-priced units. --- This analysis is based solely on the provided data and does not include any external research or assumptions beyond the given figures.

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.