Location: Nolan County, TX | Metro: Abilene, TX MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,100 |
| 1 Bedroom | $1,200 |
| 2 Bedrooms | $1,500 |
| 3 Bedrooms | $1,950 |
| 4 Bedrooms | $2,310 |
| 5 Bedrooms | $2,680 |
| 6 Bedrooms | $3,002 |
| 7 Bedrooms | $3,242 |
| 8 Bedrooms | $3,404 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,500 | $140,960 | 1.06% | B |
| 3BR | $1,950 | $216,608 | 0.9% | C |
| 4BR | $2,310 | $327,476 | 0.71% | D |
U.S. Census Bureau data (2024)
A landlord considering investing in ZIP code 79536 (Merkel, TX) for Section 8 properties must follow a structured decision-making process based on the following criteria:
1. Does the Fair Market Rent (FMR) of $1210 cover the debt service on a property valued at $185,721?
Yes. If the debt service is less than $1210 per month, then the FMR does indeed cover the cost. For instance, if the mortgage payment, including principal, interest, taxes, and insurance, totals $1100 per month, the FMR comfortably exceeds this amount.
No. If the debt service is higher than $1210 per month, then the FMR does not cover the costs. For example, if the monthly debt service is $1300, the FMR falls short by $90, indicating that the property would not be financially viable under Section 8.
It Depends. If the debt service is very close to $1210, such as $1200, then the landlord might need to consider additional expenses or potential revenue streams to make the investment worthwhile.
2. How does the market rent of $1,198 compare to the FMR?
Above. If the market rent is higher than $1210, the landlord could potentially earn more by renting to non-Section 8 tenants. However, this scenario is not applicable since the market rent is $1,198, which is below the FMR.
At. This condition is not met given the provided data.
Below. With a market rent of $1,198, it is below the FMR of $1210, indicating that the landlord could still receive the FMR through Section 8 vouchers, making the investment more attractive compared to market rates.
3. Is there sufficient demand with 26.0% of residents being renters and an unknown number of days on the market (DOM)?
Yes. A rental rate of 26.0% suggests a moderate demand for rental properties. While the exact DOM is not available, the percentage of renters indicates that there is a reasonable pool of potential Section 8 tenants.
No. This answer would apply if the percentage of renters was too low to support a rental property, but with 26.0%, it's not the case here.
It Depends. Given the lack of specific DOM data, the viability of the investment hinges on the landlord's ability to attract and retain tenants. The 26.0% figure is indicative of a stable rental market, but landlords should investigate further into vacancy rates and tenant turnover to ensure demand.
In conclusion, ZIP 79536 presents a balanced opportunity for Section 8 investments. Landlords should ensure that their debt service is covered by the FMR, understand that they can potentially earn more than the market rent through FMR, and assess the local rental market beyond just the percentage of renters to make a fully informed decision.
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.