Location: Lamb County, TX | Metro: Hockley County, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $810 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,460 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
U.S. Census Bureau data (2024)
A skeptical investor looking at ZIP code 79339 might raise several concerns regarding the feasibility of renting out properties under the Section 8 program. These objections can be addressed using the available data.
The first objection is whether the Fair Market Rent (FMR) of $1,020 for the metro area in fiscal year 2026 will sufficiently cover the mortgage on a home priced at $107,858. To evaluate this, consider that the typical mortgage payment for a property of this value, assuming a 30-year fixed-rate mortgage at an average interest rate of 4%, would be approximately $520 per month. This amount includes principal, interest, taxes, and insurance. The FMR of $1,020 is well above the estimated mortgage payment, suggesting that even with some deductions for maintenance and other expenses, the income from a Section 8 tenant could adequately cover the mortgage costs.
The second concern revolves around the level of renter demand in the area, which stands at 25.2%. While this percentage indicates a moderate demand, it's important to note that the actual number of renters is also crucial. A higher percentage but lower absolute numbers of potential tenants could still limit the pool of applicants. However, the data does not provide the total number of renters or households in ZIP 79339, making it difficult to quantify the exact size of the rental market. Investors should conduct further local research to understand the competition and the number of units available.
The final objection is whether the Housing Choice Voucher program will keep up with the market rents, currently estimated at $1,048. The FMR of $1,020 is slightly below the market rent, indicating that landlords might need to adjust their expectations. Historically, voucher amounts have been adjusted annually based on inflation and housing market conditions. If past trends hold, the voucher amount should increase to match or exceed market rents over time. However, the data does not specify future adjustments, so caution is advised when forecasting long-term rental income.
In summary, while the FMR of $1,020 appears sufficient to cover the mortgage on a $107,858 home, the moderate renter demand of 25.2% requires additional investigation into the local rental market dynamics. Lastly, although the Housing Choice Voucher program aims to align with market rents, the slight discrepancy between the FMR and the market rent of $1,048 necessitates monitoring future adjustments to ensure continued financial viability.
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.