Section 8 Fair Market Rent (FMR) for ZIP 78877 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

To determine if a landlord should buy in ZIP code 78877 for Section 8 purposes, follow these decision points:

• Does FMR $970 clear debt service on a $239,220 property?
  • If yes: The Fair Market Rent (FMR) of $970 is sufficient to cover the monthly mortgage payment and other expenses associated with a property valued at $239,220. This makes the area financially viable for Section 8 investments.
  • If no: The FMR of $970 does not sufficiently cover the debt service costs for a property priced at $239,220. Landlords should consider properties with lower purchase prices or higher rental yields to ensure financial viability.
• Is market rent above, at, or below FMR?
  • If market rent is above FMR: The market rent being higher than the FMR of $970 suggests potential for higher income beyond what is covered by Section 8 vouchers, making the investment more attractive.
  • If market rent is at FMR: The market rent aligns with the FMR, indicating that the landlord can expect to receive the full voucher amount without additional income from tenants. This scenario is stable but offers no premium over the FMR.
  • If market rent is below FMR: The market rent is lower than the FMR, which means landlords might struggle to find tenants willing to pay the difference between the voucher and the full rent. This could lead to vacancy issues or reduced income.
• Are 27.2% renters + N/A-day DOM enough demand?
  • If yes: With 27.2% of the population renting, there is a significant portion of potential tenants who could be eligible for Section 8 housing. The average days on market (DOM) being N/A indicates either insufficient data or that rentals move quickly once listed, suggesting strong demand.
  • If no: The 27.2% rental rate might not be high enough to ensure a steady stream of Section 8 tenants, especially if the DOM is unusually high. This could signal weak demand and longer periods of vacancy, impacting profitability.
  • If it depends: The 27.2% rental rate alone is not conclusive; it requires analysis alongside other factors such as the local unemployment rate, job growth, and competition from other rental units. The N/A DOM figure needs clarification to understand the actual market conditions.

Based on the above decision points, landlords can make informed decisions about investing in ZIP 78877 for Section 8 properties. It's crucial to assess each criterion carefully to ensure a successful investment.

Data Sources: FMR data from HUD (2027). 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.