Section 8 Fair Market Rent (FMR) for ZIP 79424 - 2027

Investment Score for ZIP 79424

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	$900
1 Bedroom	$1,060
2 Bedrooms	$1,250
3 Bedrooms	$1,730
4 Bedrooms	$2,070
5 Bedrooms	$2,401
6 Bedrooms	$2,689
7 Bedrooms	$2,904
8 Bedrooms	$3,049

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
2BR	$1,250	$197,967	0.63%	D
3BR	$1,730	$256,086	0.68%	D
4BR	$2,070	$405,531	0.51%	F
5BR	$2,401	$727,673	0.33%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 79424 (Lubbock, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 79424 in Lubbock, TX, is set by HUD for the year 2026. For a two-bedroom unit, the FMR is $1170, which represents 14.4% of the median household income of $97,231. This indicates that the FMR is relatively affordable compared to the local median income. However, the actual rental market in this area might be different from the FMR. According to Zillow, the median price for a two-bedroom home is $193,541, which translates to a price-to-FMR ratio of 13.8x. This high ratio suggests that the actual rental prices could be significantly higher than the FMR, creating a challenge for voucher holders who can only pay up to the FMR. In practice, landlords may prefer to rent their properties at market rates rather than accept lower rents through vouchers. #### Affordability & Renter Profile ZIP code 79424 has a population of 53,478, with 31.0% of residents being renters. The occupancy rate stands at 94.3%, indicating a robust demand for rental units. Given the median household income of $97,231, it is likely that many residents can afford market-rate housing, but there is still a significant portion of the population that relies on rental units. The high occupancy rate and the substantial percentage of renters suggest that the market is fairly tight, with limited availability of units that fall below the market rate. #### Investor Angle For investors focusing on Section 8 properties, the key question is whether they can achieve positive cash flow at the FMR levels. Given the high price-to-FMR ratio of 13.8x, it is clear that purchasing a property at the median price would not be financially viable for a Section 8 investor. Instead, investors should look for properties priced closer to the FMR levels. For instance, a two-bedroom unit priced at $1170 per month would need to be purchased at a price that allows for a reasonable return on investment when rented out under the Section 8 program. The investment grade for this ZIP code would be considered low due to the high price-to-FMR ratio. Investors should focus on finding undervalued properties or those with potential for renovation and value addition to make the investment more attractive. Additionally, the high occupancy rate suggests that there is strong demand for rental units, which could support higher rents and potentially better returns for non-Section 8 investments. #### Specific Actionable Insights 1. **Focus on Undervalued Properties**: Investors should seek out properties that are priced below the median, ideally closer to the FMR levels. A two-bedroom unit priced around $117,000 or less would be more feasible for a Section 8 investment, given the $1170 FMR. This would allow for a better cash flow position. 2. **Consider Renovation Projects**: Given the high price-to-FMR ratio, investors might find opportunities in older properties that can be renovated and brought up to standard. By investing in renovations, they can potentially increase the rental value while still maintaining affordability within the FMR guidelines. 3. **Explore Non-Section 8 Rental Opportunities**: Due to the high price-to-FMR ratio, it might be more profitable to target the broader rental market. With a median household income of $97,231, there is a significant segment of the population that can afford higher rents. This could lead to better cash flows and overall returns on investment. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 79424 is to **Skip**. The high price-to-FMR ratio makes it challenging to achieve positive cash flow, and the tight rental market suggests that landlords may prefer to rent at market rates rather than accept vouchers. However, for investors willing to explore non-Section 8 rental opportunities, the recommendation is to **Hold** or even **Buy**, given the strong demand and higher potential rental values. In summary, while the market dynamics are favorable for general rental investments, the specific constraints for Section 8 voucher holders make this ZIP code less attractive for such targeted investments.

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.