Section 8 Fair Market Rent (FMR) for ZIP 78840 - 2027

Investment Score for ZIP 78840

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	$870
1 Bedroom	$920
2 Bedrooms	$1,120
3 Bedrooms	$1,490
4 Bedrooms	$1,650
5 Bedrooms	$1,914
6 Bedrooms	$2,144
7 Bedrooms	$2,316
8 Bedrooms	$2,432

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,120	$162,705	0.69%	D
3BR	$1,490	$251,765	0.59%	F
4BR	$1,650	$362,362	0.46%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 78840 (Del Rio, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 78840 is set by HUD for 2026 as follows: - 0BR: $850 - 1BR: $860 - 2BR: $1060 - 3BR: $1440 - 4BR: $1450 These figures represent the maximum rent that a Section 8 voucher holder can pay. However, the actual rents in Del Rio are significantly higher, especially when considering the Zillow median price for a 2BR property at $158,238. The price-to-FMR ratio for a 2BR unit is 12.4x, indicating that the median price of a 2BR home is approximately $13,128 per month if it were rented out at the same rate as its purchase price. This is far above the FMR of $1060, which means that voucher holders face significant constraints in finding affordable housing. They would likely be limited to smaller units or properties that are below average in terms of quality and amenities. #### Affordability & Renter Profile In ZIP code 78840, 31.1% of the population are renters, with a total population of 47,256. This translates to about 14,699 renters. Given the occupancy rate of 90.0%, there is a strong demand for rental properties, suggesting that the market is relatively tight. The median household income is $66,084, and 2BR units at the FMR level account for 19.2% of this income. This implies that a household earning the median income would spend roughly $12,634 annually on rent for a 2BR unit, which is a considerable portion of their income. Given these factors, the typical renter profile would include individuals or families who are seeking affordable housing options and are likely to be sensitive to cost increases. The high price-to-FMR ratio indicates that many renters, particularly those relying on Section 8 vouchers, may struggle to find suitable housing within their budget. This tight market could lead to competition among renters and potentially higher rents for non-voucher holders. #### Investor Angle From an investor perspective, the ZIP code 78840 presents a mixed picture. The FMR levels are significantly lower than the actual market rents, making it challenging to achieve positive cash flow purely based on FMR. For example, a 2BR unit priced at the FMR of $1060 would need to cover all expenses, including mortgage payments, maintenance, and other costs, which are likely much higher given the median home price of $158,238. However, the strong demand for rental properties and the tight market conditions suggest that there is potential for steady occupancy rates and rental income. Investors should consider the broader rental market dynamics and the possibility of renting to non-voucher holders at higher rates. The investment grade would depend on the ability to manage costs effectively and the likelihood of securing tenants willing to pay above FMR rates. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the constraints faced by Section 8 voucher holders, investing in smaller units such as 0BR or 1BR properties might yield better returns. These units are more likely to be rented at or near the FMR without significant vacancy issues. For instance, a 1BR unit at $860 per month would be more accessible to voucher holders compared to a 2BR unit at $1060. 2. **Target Affordable Housing Projects**: Investors looking to cater specifically to the needs of low-income renters could focus on projects that aim to provide affordable housing. This could involve developing or renovating properties that are priced closer to the FMR levels. Additionally, partnerships with local government agencies or non-profits could provide additional financial incentives and support. 3. **Diversify Tenant Base**: To ensure positive cash flow, investors should diversify their tenant base beyond just Section 8 voucher holders. This could mean targeting a mix of low-income and moderate-income renters, as well as offering competitive amenities and services to attract tenants willing to pay above FMR rates. For example, a 2BR unit priced at $1200 per month would still be attractive to many renters and could help balance the overall portfolio. #### Bottom Line For Section 8-focused investors, the ZIP code 78840 presents a challenging environment due to the high price-to-FMR ratio and the tight rental market. While there is strong demand for rental properties, achieving positive cash flow purely based on FMR is unlikely. Therefore, the recommendation is to **Skip** this ZIP code for pure Section 8 investments. Instead, investors should consider a diversified approach that includes a mix of affordable and market-rate rentals to ensure sustainable returns.

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.