Location: Upton County, TX | Metro: Midland, TX HUD Metro FMR Area
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 | $1,290 |
| 1 Bedroom | $1,310 |
| 2 Bedrooms | $1,630 |
| 3 Bedrooms | $2,060 |
| 4 Bedrooms | $2,410 |
| 5 Bedrooms | $2,796 |
| 6 Bedrooms | $3,132 |
| 7 Bedrooms | $3,383 |
| 8 Bedrooms | $3,552 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,060 | $353,173 | 0.58% | F |
| 4BR | $2,410 | $448,022 | 0.54% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 79706 is centered around the significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1530, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $2,083. This creates a disparity of $553 per month, or approximately 26.6%, where landlords can receive a higher subsidy rate through the Housing Choice Voucher program compared to the average rental price in the area.
Given that the FMR is lower than the market rent, landlords accepting Section 8 tenants must consider the cost implications of renting below open-market rates. While the subsidy covers a substantial portion of the rent, landlords might still face challenges such as stricter maintenance standards and quicker turnover, which can affect overall yields. However, the lower FMR also means that voucher tenants are likely to be more stable and less financially risky compared to other tenants who might struggle to meet higher market rents.
In the context of ZIP 79706, where only 20.4% of residents are renters and the median home value stands at $379,221, the rental market is relatively smaller and more competitive. With a median income of $108,059, many residents may opt for homeownership over renting, further emphasizing the importance of the Section 8 program for those who cannot afford market rates. Landlords should evaluate the potential for long-term, stable occupancy against the slightly reduced rental income when considering whether to participate in the Section 8 program.
To summarize, the gap between the FMR and market rent in ZIP 79706 presents an opportunity for landlords to receive above-average rental subsidies while potentially managing a more stable tenant pool. The decision to accept Section 8 tenants should be weighed against the broader economic context of the area, including the limited rental market and the financial stability of voucher recipients.
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.