Section 8 Fair Market Rent (FMR) for ZIP 78741 - 2027

Investment Score for ZIP 78741

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	$1,430
1 Bedroom	$1,510
2 Bedrooms	$1,790
3 Bedrooms	$2,260
4 Bedrooms	$2,650
5 Bedrooms	$3,074
6 Bedrooms	$3,443
7 Bedrooms	$3,718
8 Bedrooms	$3,904

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
1BR	$1,510	$169,176	0.89%	C
2BR	$1,790	$282,016	0.63%	D
3BR	$2,260	$388,246	0.58%	F
4BR	$2,650	$425,279	0.62%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78741 (Austin, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78741 in Austin, TX, is set by HUD for 2026. For a two-bedroom apartment, the FMR is $1800. However, the actual median rent for a two-bedroom unit on Zillow is $289,722, which translates to a monthly price-to-FMR ratio of 13.4x. This indicates that actual rents are significantly higher than the FMR. Specifically, a typical two-bedroom rental costs around $2414 per month ($289,722 / 12), which is far above the $1800 FMR limit. Consequently, Section 8 voucher holders face significant constraints in finding affordable housing within their budget. #### Affordability & Renter Profile ZIP code 78741 has a population of 45,951, with 84.7% being renters. The median household income is $66,741, and the occupancy rate is 92.0%. Given that 32.4% of the median income is required for a two-bedroom apartment at the FMR level, it suggests that the majority of residents are likely to be low-income households who rely heavily on rental assistance programs like Section 8. The high rent-to-income ratio and the fact that most residents are renters indicate a tight market where demand exceeds supply, making it challenging for low-income individuals to find affordable housing without assistance. #### Investor Angle From an investor perspective, the ZIP code 78741 presents a mixed picture. The FMR for a two-bedroom apartment is $1800, but the actual median rent is approximately $2414 per month. While the higher actual rent might seem attractive, the FMR constraint means that Section 8 voucher holders can only pay up to $1800. Therefore, properties rented exclusively to Section 8 tenants would need to operate within this lower rent ceiling. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical expenses associated with property management. Assuming a conservative estimate of 50% of the FMR for expenses (including maintenance, utilities, insurance, and property taxes), the net income would be $900 per month. This is a modest amount, especially considering the potential vacancy rates and the administrative burden of managing Section 8 properties. Given these factors, the investment grade for this ZIP code would be moderate to low. The primary challenge is the limited ability to charge rents above the FMR, which could impact profitability. Additionally, the high rent-to-income ratio suggests that there is a risk of tenant instability due to the financial strain of meeting rent payments. #### Specific Actionable Insights 1. **Target Properties Below FMR**: Investors should focus on acquiring properties where the rent is already below the FMR levels. For example, a two-bedroom apartment renting for $1600 would be more attractive since it aligns better with the FMR and reduces the risk of non-payment by tenants. 2. **Consider Mixed Tenancy**: To balance the financial risks associated with Section 8 tenants, investors might want to consider a mixed tenancy approach. This involves having a portion of units rented to Section 8 voucher holders while others are rented to market-rate tenants. This strategy can help stabilize cash flow and mitigate the impact of lower rents. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 78741 is to **Hold**. While there is a significant demand for affordable housing, the tight market and high actual rents make it challenging to find properties that can be rented profitably at the FMR levels. Investors should carefully evaluate the potential for mixed tenancy and target properties with rents already below the FMR to ensure financial viability.

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.