Location: Austin-Round Rock-San Marcos, 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 | $1,700 |
| 1 Bedroom | $1,790 |
| 2 Bedrooms | $2,130 |
| 3 Bedrooms | $2,690 |
| 4 Bedrooms | $3,150 |
| 5 Bedrooms | $3,654 |
| 6 Bedrooms | $4,092 |
| 7 Bedrooms | $4,419 |
| 8 Bedrooms | $4,640 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,130 | $390,196 | 0.55% | F |
| 3BR | $2,690 | $671,476 | 0.4% | F |
| 4BR | $3,150 | $1,010,152 | 0.31% | F |
| 5BR | $3,654 | $2,077,863 | 0.18% | F |
U.S. Census Bureau data (2024)
In ZIP code 78735, located in Travis County, Texas, the economics of Section 8 vouchers can be quite favorable for landlords. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP code for fiscal year 2024 is set at $2350. This SAFMR figure is specifically tailored for this ZIP code, ensuring that it reflects the local rental market conditions accurately.
The local market rent, as indicated by ZORI (Zillow Observed Rent Index), is currently running at $1,579 for a two-bedroom unit. This means that the SAFMR is significantly higher than the average market rent, which is beneficial for landlords participating in the Section 8 program.
A Section 8 voucher payment is structured to cover most of the rent, but not all. The tenant is responsible for paying 30% of their adjusted income toward rent, plus any applicable utility allowances. For instance, if a tenant's monthly adjusted income is $2,000, they would pay 30% of that, which is $600, towards rent. Utility allowances vary but typically range between $200-$300 per month, depending on the household size and location.
To illustrate, let's assume the tenant pays $600 for rent and utilities and receives a utility allowance of $250. In this case, the total contribution from the tenant towards the rent would be $850 ($600 + $250). Therefore, the voucher would cover the remaining amount up to the SAFMR of $2350. This results in a reimbursement of $1500 from the voucher program, making the total rental income for a two-bedroom unit $2350.
Given the local market rent of $1,579, a landlord in ZIP 78735 could potentially earn a surplus of over $700 per month when renting to a Section 8 tenant. This surplus comes from the difference between the SAFMR and the local market rent. It is important to note that this calculation assumes the landlord sets the rent at the SAFMR level, which is permissible under the program rules.
In summary, landlords in ZIP 78735 can expect a substantial financial benefit from renting to tenants with Section 8 vouchers. The reimbursement structure allows them to receive payments that exceed the average market rent, thus providing a reliable and lucrative source of income. The typical reimbursement gap or surplus for a two-bedroom apartment in this ZIP code is approximately $771 per month, based on the SAFMR and ZORI figures provided.
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.