Section 8 Fair Market Rent (FMR) for ZIP 78718 - 2027

FY 2027 Fair Market Rent Rates

The economics of Section 8 in ZIP code 78718, located in Travis County, Texas, involve understanding the SAFMR (Small Area Fair Market Rent) and how it interacts with the local rental market. For a two-bedroom apartment in FY 2024, the SAFMR is set at $1950. This figure represents the maximum amount that the housing authority will pay on behalf of a tenant under the Section 8 program for this specific ZIP code.

A voucher payment consists of two parts: the tenant's contribution and the housing authority's reimbursement. The tenant must contribute 30% of their adjusted income towards the rent. If we assume an average adjusted income of $1500 per month, the tenant would contribute $450 towards the rent. This leaves the housing authority to cover the remaining $1500 of the $1950 SAFMR.

In addition to the base rent, there are utility allowances which vary depending on the region and type of utilities used. In ZIP 78718, the utility allowance for a two-bedroom unit is typically around $200. This means the total reimbursement by the housing authority can be up to $1750 ($1500 base rent + $200 utilities).

To walk a landlord through the actual payments, consider a scenario where the local market rent for a similar two-bedroom unit is higher than the SAFMR. If the market rent is, say, $2200, the landlord would receive $1750 from the housing authority and $450 from the tenant, totaling $2200. However, if the market rent is lower, such as $1800, the landlord would still only receive $1750, creating a $100 shortfall.

The SAFMR being set specifically for ZIP 78718 means that it reflects the unique economic conditions of this area, including housing costs and availability. Landlords should note that while the SAFMR provides a guaranteed minimum payment, it does not necessarily reflect the full market value of their property. Therefore, landlords need to assess whether accepting a Section 8 tenant aligns with their financial goals and property management strategies.

In summary, for a two-bedroom apartment in ZIP 78718, the typical reimbursement gap or surplus can be calculated based on the difference between the market rent and the $1750 maximum reimbursement. If the market rent is exactly $1950, there is no gap or surplus; however, any deviation above or below this amount will result in either a surplus for the landlord or a gap that they must absorb.

Data Sources: FMR data from HUD (2027).

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.