Section 8 Fair Market Rent (FMR) for ZIP 79705 - 2027

Investment Score for ZIP 79705

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	$1,380
1 Bedroom	$1,450
2 Bedrooms	$1,850
3 Bedrooms	$2,290
4 Bedrooms	$2,490
5 Bedrooms	$2,888
6 Bedrooms	$3,235
7 Bedrooms	$3,494
8 Bedrooms	$3,669

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,850	$249,456	0.74%	D
3BR	$2,290	$333,203	0.69%	D
4BR	$2,490	$429,618	0.58%	F
5BR	$2,888	$630,603	0.46%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 79705 (Midland, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 79705 in Midland, Texas, are set by HUD for 2026. The FMRs for different unit sizes are as follows: - 0BR: $1480 - 1BR: $1510 - 2BR: $1850 - 3BR: $2380 - 4BR: $2760 Comparing these FMRs to actual rental prices, we find that the FMR for a 2BR unit is $1850, which is significantly lower than the Zillow median price for a 2BR home of $243,772. This suggests that the actual rental market is much higher than the FMR, indicating a potential gap between what voucher holders can afford and the actual rental prices. Voucher holders face constraints due to the disparity between FMR and actual rents. For instance, a 2BR unit priced at $1850 would only cover about 76% of the Zillow median price ($243,772). This means that voucher holders might struggle to find suitable housing within their budget, particularly if landlords require additional rent beyond the FMR. #### Affordability & Renter Profile ZIP code 79705 has a population of 46,653, with 28.8% of residents being renters. The occupancy rate is 92.7%, suggesting a tight rental market where most available units are occupied. Given the median household income of $105,310, the rental market appears to be relatively affordable for non-voucher holders. However, for those relying on Section 8 vouchers, the high price-to-FMR ratio of 11.0x indicates that the market is very challenging. The affordability issue is further highlighted by the fact that a 2BR unit at FMR ($1850) represents 21.1% of the median income. This percentage is relatively low, but it does not account for other living expenses, making it difficult for low-income households to find affordable housing without additional financial support. #### Investor Angle From an investor's perspective, the ZIP code 79705 presents both opportunities and challenges. The high price-to-FMR ratio of 11.0x suggests that the rental market is robust, with demand outstripping supply. However, the tight market and high occupancy rates mean that there is limited room for new rentals unless they can compete effectively with existing properties. To determine if the ZIP is cash-flow positive at FMR, we need to consider the typical rental yields. Assuming a conservative yield of 5% for a 2BR property priced at $243,772, the expected monthly rent would be approximately $1016. This is well below the FMR of $1850, indicating that properties rented at FMR levels should generate positive cash flow. However, the investment grade is likely to be moderate due to the high price-to-FMR ratio and the challenge of finding tenants who can meet the FMR without additional rent. Investors should carefully assess the local rental market dynamics and the willingness of landlords to accept Section 8 vouchers. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, smaller units like 0BR and 1BR might be more attractive to voucher holders. These units have FMRs of $1480 and $1510, respectively, which are closer to the typical rental yields and might offer better cash flow opportunities. 2. **Engage with Local Landlords**: Understanding the local landlord community is crucial. Some landlords might be willing to accept Section 8 vouchers despite the high price-to-FMR ratio, while others might prefer traditional renters. Engaging with local real estate agents and property managers can provide insights into the acceptance rate of Section 8 vouchers. 3. **Consider Renovation Projects**: Investing in properties that require renovations could be a viable strategy. By purchasing homes at a discount and renovating them to increase their value, investors can potentially achieve higher rents that still fall within the FMR guidelines. This approach can help bridge the gap between FMR and actual rental prices. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 79705 is to **Hold**. While the rental market is strong and the occupancy rate is high, the significant gap between FMR and actual rental prices poses a challenge for voucher holders. Focusing on smaller units and engaging with local landlords who are willing to accept vouchers could mitigate some of these risks. However, given the high price-to-FMR ratio, it is advisable to proceed cautiously and ensure thorough due diligence before investing.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.