Section 8 Fair Market Rent (FMR) for ZIP 78634 - 2027

Investment Score for ZIP 78634

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	$1,730
1 Bedroom	$1,830
2 Bedrooms	$2,170
3 Bedrooms	$2,740
4 Bedrooms	$3,210
5 Bedrooms	$3,724
6 Bedrooms	$4,171
7 Bedrooms	$4,505
8 Bedrooms	$4,730

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
3BR	$2,740	$301,752	0.91%	C
4BR	$3,210	$348,006	0.92%	C
5BR	$3,724	$411,666	0.9%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78634 (Austin, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78634 in Austin, Texas, is set by HUD for the year 2026. The FMRs are as follows: - 0BR: $1780 - 1BR: $1880 - 2BR: $2230 - 3BR: $2830 - 4BR: $3320 Given that there is no recent Zillow data available, we cannot directly compare these figures to actual market rents. However, it is important to note that the FMRs represent the maximum amount that a Section 8 voucher holder can pay towards rent. If actual rents exceed these amounts, voucher holders will face significant constraints in finding suitable housing. #### Affordability & Renter Profile ZIP code 78634 has a population of 46,413, with 21.4% of residents being renters. This indicates a relatively small rental market compared to the overall population. The occupancy rate stands at 96.8%, suggesting a tight market where most units are occupied, which could lead to upward pressure on rents. The median household income in this area is $114,426, which is quite high. For context, the 2BR FMR of $2230 represents only 23.4% of the median income, indicating that the rental market is generally affordable for the average resident. However, low-income households who rely on Section 8 vouchers might find it challenging to secure housing, especially if landlords prefer higher-paying tenants. #### Investor Angle From an investor’s perspective, the key question is whether properties rented at FMR levels would be cash-flow positive. Given the lack of recent Zillow data, we must rely on the FMRs and other economic indicators to make an informed assessment. In ZIP 78634, the FMR for a 2BR unit is $2230, which is a reasonable starting point. Assuming typical operating expenses such as property taxes, insurance, maintenance, and utilities, an investor would need to ensure that the net income exceeds these costs. In a high-income area like 78634, the likelihood of achieving positive cash flow is higher due to the strong demand for rentals and the ability to potentially charge slightly above FMR. However, the investment grade would depend on factors such as vacancy rates, competition from other rental properties, and the willingness of landlords to accept Section 8 vouchers. High median incomes suggest that many landlords might prefer market-rate tenants, which could make it difficult for Section 8 voucher holders to find housing. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the FMRs, smaller units (0BR and 1BR) are likely to be more affordable for Section 8 voucher holders. These units might have better occupancy rates and could be more attractive to landlords due to lower upfront costs and easier management. - Example: A 0BR unit at $1780 per month could be a good investment if you can manage the property efficiently and keep operating costs low. 2. **Consider Multi-Family Properties**: Multi-family properties often offer economies of scale, making them more viable for investors targeting Section 8 voucher holders. With a 2BR unit at $2230, the combined income from multiple units could provide a stable cash flow. - Example: A multi-family complex with 2BR units could generate a total monthly income of $6690 for three units, which might cover the combined operating expenses and still yield a profit. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help ensure a steady stream of Section 8 voucher holders. This can mitigate the risk of vacancies and provide a reliable tenant base. - Example: Contacting the Travis County Housing Authority to understand their policies and processes can be beneficial in securing long-term tenants. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 78634 is to **Hold**. While the area is generally affluent and has a high occupancy rate, the tight market conditions and potential preference for market-rate tenants by landlords mean that securing consistent occupancy with Section 8 vouchers might be challenging. Investors should focus on smaller units and multi-family properties to maximize cash flow and consider engaging with local housing authorities to improve the chances of successful tenancy. This ZIP code presents a mixed picture for Section 8 investors, with both opportunities and challenges. The high median income suggests that the market is robust, but the limited availability of recent rental data makes it difficult to assess the exact dynamics. Therefore, a cautious approach is advised.

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.