Location: Lubbock, TX | Metro: Lubbock, TX HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $740 |
| 1 Bedroom | $900 |
| 2 Bedrooms | $1,060 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,750 |
| 5 Bedrooms | $2,030 |
| 6 Bedrooms | $2,274 |
| 7 Bedrooms | $2,456 |
| 8 Bedrooms | $2,579 |
U.S. Census Bureau data (2024)
If a landlord is considering purchasing a property in ZIP code 79357 for Section 8 purposes, they must follow a structured decision-making process based on financial metrics and market conditions.
Step 1: Evaluate if the Fair Market Rent (FMR) of $920 can cover the debt service on an $85,280 property. The FMR is the maximum amount that a housing voucher will pay toward rent in a given area. To determine if this covers the debt service, calculate the monthly mortgage payment including principal, interest, taxes, and insurance. For a property valued at $85,280, assuming a typical mortgage rate and down payment, the monthly debt service would likely be around $500-$600. Since the FMR is $920, it clearly exceeds the expected debt service, providing a positive cash flow. Therefore, the answer to the first question is yes.
Step 2: Compare the FMR of $920 with the average market rent of $775. The FMR is set higher than the average market rent to ensure that voucher holders can access a wide range of rental properties. In this case, the FMR is significantly above the market rent, indicating that Section 8 tenants could potentially afford more expensive units, which might attract landlords looking for higher rents. This scenario suggests a yes, as landlords could leverage the higher FMR to their advantage.
Step 3: Assess the demand for rentals in the area. With 30.3% of residents being renters, there is a notable rental population. However, the lack of data on days on the market (DOM) means we cannot fully evaluate the speed at which properties are rented out. Despite this, the percentage of renters indicates sufficient demand. Thus, the answer to the third question is it depends. While the rental population is substantial, landlords need to consider other factors such as the local vacancy rate and competition among landlords.
In summary, for ZIP code 79357, the Fair Market Rent of $920 surpasses the expected debt service on an $85,280 property, and it is notably higher than the average market rent of $775. There is a significant rental population at 30.3%, but without knowing the days on the market, landlords must rely on additional local market research to confirm whether the demand is strong enough to warrant investment. Given these points, landlords should proceed cautiously but with optimism, as the financial metrics suggest a favorable environment for Section 8 properties.
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.