Location: McAllen-Edinburg-Mission, TX | Metro: McAllen-Edinburg-Mission, TX MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $840 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $1,070 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,510 |
| 5 Bedrooms | $1,752 |
| 6 Bedrooms | $1,962 |
| 7 Bedrooms | $2,119 |
| 8 Bedrooms | $2,225 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,070 | $123,201 | 0.87% | C |
| 3BR | $1,370 | $185,452 | 0.74% | D |
| 4BR | $1,510 | $284,476 | 0.53% | F |
| 5BR | $1,752 | $352,971 | 0.5% | F |
U.S. Census Bureau data (2024)
The Section 8 market in ZIP code 78599, located in Weslaco, TX within Hidalgo County and the McAllen-Edinburg-Mission, TX MSA, presents a challenging but manageable environment for landlords and small-portfolio investors. The Fair Market Rent (FMR) as defined by HUD for this area in fiscal year 2024 is set at $980 per month. However, the market rent based on Census ACS data stands at $1,007 per month.
This comparison indicates that voucher tenants will generally not cover the full market rent, resulting in a negative cash flow scenario for standard units. Landlords can expect to subsidize approximately $127 per unit monthly to break even. For investors, this suggests that cashflow will be marginal unless they focus on premium units that command higher rents or have lower operating costs due to efficiency or location advantages.
The median home value in ZIP 78599 is $192,161. Using the HUD FMR of $980, the annualized rent would be $11,760, which translates to a rent-to-price ratio of about 6.1%. This ratio provides insight into the relative affordability of renting versus buying in the area. Given the relatively low median home value, it's important to note that the dynamics between renting and buying could influence the rental market, although with a median Days on Market (DOM) of N/A and a price-cut share of 0.2%, these factors do not significantly impact the decision-making process for most investors.
The strongest investment angle in ZIP 78599 is stability. Despite the challenges with cashflow, the low volatility in home values and the minimal need for price reductions suggest a stable market where property values are unlikely to fluctuate drastically. This makes it an attractive option for investors seeking long-term, consistent returns rather than short-term gains through appreciation or aggressive cashflow strategies.
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.