Location: Llano County, TX | Metro: Burnet County, TX
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 | $1,160 |
| 1 Bedroom | $1,220 |
| 2 Bedrooms | $1,530 |
| 3 Bedrooms | $2,070 |
| 4 Bedrooms | $2,120 |
| 5 Bedrooms | $2,459 |
| 6 Bedrooms | $2,754 |
| 7 Bedrooms | $2,974 |
| 8 Bedrooms | $3,123 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,530 | $328,022 | 0.47% | F |
| 3BR | $2,070 | $580,457 | 0.36% | F |
| 4BR | $2,120 | $1,223,561 | 0.17% | F |
| 5BR | $2,459 | $2,700,438 | 0.09% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 78657, which encompasses Horseshoe Bay, TX, and parts of Llano County, operate under specific financial guidelines that impact landlords and small-portfolio investors. For fiscal year 2026, the SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP code is set at $1,450. This figure represents the maximum amount that a Section 8 voucher will cover for rent in the area.
In contrast, the local market rent for a similar two-bedroom unit is $1,933, based on the ZORI (Zillow Observed Rent Index). This indicates that landlords could potentially charge a higher rent if they were not participating in the Section 8 program.
A landlord must understand that the voucher payment is not the only component of the rental income. Tenants are required to contribute a portion of their income towards rent. Specifically, they pay 30% of their adjusted monthly income, which can vary widely depending on the individual's financial situation. If the tenant’s contribution is less than the difference between the market rent and the SAFMR, the landlord will receive the shortfall from the tenant directly. However, the total rent received cannot exceed the market rent of $1,933.
Additionally, there are utility allowances that can be factored into the overall compensation. These allowances vary but typically cover a portion of the tenant’s electricity, gas, water, and sewer costs. For a two-bedroom apartment, the utility allowance might be around $250 per month, although this can fluctuate based on the specific circumstances of the property and the tenant.
To illustrate, let’s assume a tenant’s contribution is $400. In this scenario, the landlord would receive $1,450 from the Section 8 voucher program plus the $400 from the tenant, totaling $1,850. The landlord would then also receive the utility allowance, bringing the total to approximately $2,100. However, because the market rent is capped at $1,933, the landlord would only collect $1,933 in rent, plus the utility allowance.
This means that for a two-bedroom unit in ZIP 78657, the typical reimbursement gap is $483 ($1,933 - $1,450), which is the difference between the local market rent and the SAFMR. Landlords should consider this gap when deciding whether to participate in the Section 8 program. While the program ensures timely payments, it does come with a lower rental income compared to the market rate.
In summary, the SAFMR of $1,450 for a two-bedroom apartment in ZIP 78657 sets the maximum rent subsidy available through Section 8 vouchers. Local market rents at $1,933 indicate a potential loss of $483 per month for landlords who choose to accept vouchers, unless they can offset this with higher tenant contributions or utility allowances. This economic framework is crucial for landlords to understand before entering into a Section 8 agreement.
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.