Location: Lee County, TX | Metro: Austin-Round Rock-San Marcos, 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 | $1,330 |
| 1 Bedroom | $1,410 |
| 2 Bedrooms | $1,670 |
| 3 Bedrooms | $2,120 |
| 4 Bedrooms | $2,490 |
| 5 Bedrooms | $2,888 |
| 6 Bedrooms | $3,235 |
| 7 Bedrooms | $3,494 |
| 8 Bedrooms | $3,669 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,120 | $410,398 | 0.52% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP 78659 might raise several concerns regarding the feasibility of investing in rental properties through the Section 8 program. Here are some common objections, addressed with available data.
Objection 1: Will Fair Market Rent (FMR) of $1470 for ZIP 78659 in fiscal year 2024 cover the mortgage on a $450,285 home?
The FMR of $1470 per month must be compared against the potential monthly mortgage payment for a property priced at $450,285. Assuming a typical mortgage rate of around 5%, the monthly payment on a $450,285 home could be approximately $2,300, including principal, interest, taxes, and insurance. This amount exceeds the FMR significantly, suggesting that the FMR alone may not sufficiently cover the mortgage expenses. However, it's important to note that the FMR is the maximum amount set by HUD for rental subsidies and does not reflect the actual rent paid by all tenants in the area. Landlords can negotiate higher rents with non-subsidized tenants, thereby balancing their income streams.
Objection 2: Is there enough renter demand at 5.5%?
ZIP 78659 has a rental vacancy rate of 5.5%. This percentage indicates the proportion of rental units that are unoccupied at any given time. A lower vacancy rate suggests a strong demand for rentals. However, the data does not specify the exact number of renters in the area nor the number of Section 8 eligible households. To fully assess the demand, an investor would need to consider additional factors such as population growth trends, job market stability, and the overall housing supply. The current vacancy rate implies that there is a reasonable level of demand, but it does not guarantee a high occupancy rate for subsidized units specifically.
Objection 3: Will vouchers keep pace with the market rents?
The question of whether vouchers will keep up with market rents is critical. Unfortunately, the data provided does not include specific information on how voucher amounts adjust over time or in comparison to market rents. Typically, voucher amounts are reviewed periodically, but they often lag behind rapid increases in market rents. Investors should be aware that while vouchers provide a reliable source of income, they may not always match the highest market rates. This can be mitigated by understanding the local rental market dynamics and possibly targeting properties that appeal to a broader range of renters, not just those with vouchers.
In conclusion, while the FMR of $1470 may not fully cover the mortgage on a $450,285 home, diversifying tenant types can help manage financial risks. The 5.5% vacancy rate suggests moderate demand, but detailed local market analysis is necessary for a complete picture. Lastly, the pace at which vouchers keep up with market rents remains uncertain without more specific data, indicating a need for ongoing monitoring of both voucher policies and market conditions.
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.