Location: Odessa, 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 | $1,340 |
| 1 Bedroom | $1,410 |
| 2 Bedrooms | $1,800 |
| 3 Bedrooms | $2,230 |
| 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 |
|---|---|---|---|---|
| 2BR | $1,800 | $243,227 | 0.74% | D |
| 3BR | $2,230 | $337,958 | 0.66% | D |
| 4BR | $2,410 | $527,551 | 0.46% | F |
| 5BR | $2,796 | $753,599 | 0.37% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate scenario for ZIP code 79707 in Midland, TX, can be analyzed using the Fair Market Rent (FMR) and Zillow Observed Rent Index (ZORI) for a two-bedroom property. The annualized FMR for a 2BR in this area for FY 2024 is $1600 per month, while the ZORI indicates a market rent of $1510 per month.
To calculate the implied gross yield, we first need to annualize these figures. For the FMR, the annual rent would be $1600 multiplied by 12 months, resulting in an annual rent of $19,200. Using the median home value of $416,270, the implied gross yield based on FMR is calculated as follows:
Next, we annualize the ZORI figure. The annual rent at $1510 per month would be $1510 multiplied by 12 months, equaling an annual rent of $18,120. With the same median home value, the implied gross yield based on ZORI is:
The gross yield comparison between the FMR and ZORI scenarios shows that the FMR offers a slightly higher gross yield at 4.61%, compared to the ZORI's gross yield of 4.35%. However, given the 40.0% renter density and the average days on market (DOM) of 27 days, it is more realistic to consider the ZORI gross yield as the benchmark for investment analysis. This is because the lower market rent reflects the actual demand and supply dynamics in the local rental market, indicating that the majority of tenants might prefer the market rent over the FMR. Therefore, while the FMR provides a theoretical upper limit, the ZORI gross yield gives a more practical outlook for potential investors in ZIP 79707.
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.