Section 8 Fair Market Rent (FMR) for ZIP 79907 - 2027

Investment Score for ZIP 79907

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	$740
1 Bedroom	$920
2 Bedrooms	$1,080
3 Bedrooms	$1,470
4 Bedrooms	$1,800
5 Bedrooms	$2,088
6 Bedrooms	$2,339
7 Bedrooms	$2,526
8 Bedrooms	$2,652

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	$1,080	$150,295	0.72%	D
3BR	$1,470	$184,830	0.8%	D
4BR	$1,800	$207,851	0.87%	C
5BR	$2,088	$257,879	0.81%	C

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 79907 (El Paso, TX) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 79907, as set by HUD for 2026, provide a benchmark for rental costs in the area. For a two-bedroom unit, the FMR is $1,080, which represents 31.1% of the median household income of $41,617. However, the actual market rent for a two-bedroom unit, based on Zillow data, is significantly higher at $147,001. This implies that the price-to-FMR ratio is 11.3x, indicating that actual market rents are much higher than the FMR. Given these figures, there is a substantial gap between the FMR and the actual rents. For instance, a three-bedroom unit has an FMR of $1,490, while a four-bedroom unit has an FMR of $1,810. This means that voucher holders are constrained by the FMR limits and may struggle to find units that fit their needs within the allowable rent range. The high price-to-FMR ratio suggests that landlords might be less inclined to accept Section 8 vouchers due to the lower rent they can charge compared to market rates. #### Affordability & Renter Profile ZIP code 79907 has a population of 46,365, with 40.7% of residents being renters. This indicates a significant portion of the population relies on rental housing. The occupancy rate stands at 91.3%, suggesting a relatively tight market where most available units are occupied. Given the median household income of $41,617, affordability is a key concern for many residents. The FMR for a two-bedroom unit at $1,080 is already a significant portion of the median income, and the actual market rent of $147,001 is even more challenging. This tight market and high rent-to-income ratio suggest that many renters are likely to be cost-burdened, meaning they spend a disproportionate amount of their income on housing. The 31.1% of median income required for a two-bedroom unit is well above the recommended threshold of 30%, indicating that renters in this area face considerable financial pressure. #### Investor Angle From an investor perspective, the ZIP code 79907 presents both opportunities and challenges. The high actual market rent suggests strong demand for rental properties, but the FMR limits could affect cash flow if relying solely on Section 8 vouchers. For a two-bedroom unit, the FMR of $1,080 is far below the market rent of $147,001. If an investor were to focus on Section 8 vouchers, they would need to ensure that the property is priced competitively within the FMR range to attract tenants. However, given the high price-to-FMR ratio, it is likely that cash flow would be positive if the investor could secure market rents rather than FMR-based rents. The investment grade for this ZIP code would depend on the ability to balance between market rents and FMR limits. While the market appears strong, the reliance on Section 8 vouchers would require careful management to avoid negative cash flow scenarios. #### Specific Actionable Insights 1. **Focus on Market Rents**: Given the high price-to-FMR ratio, investors should consider targeting market rents rather than strictly relying on Section 8 vouchers. A two-bedroom unit priced at the market rate of $147,001 would likely generate better cash flow and returns compared to the FMR of $1,080. 2. **Diversify Tenant Base**: To mitigate risks associated with Section 8 vouchers, investors should diversify their tenant base. This can include a mix of market-rate tenants and voucher holders. By doing so, they can leverage the strong demand for rentals while still benefiting from the stability that comes with Section 8 vouchers. 3. **Target Larger Units**: Since the FMR for larger units (three-bedroom and four-bedroom) is higher, investors might find it more financially viable to target these larger units. For example, a four-bedroom unit with an FMR of $1,810 is closer to the median income threshold and might attract more tenants who are not cost-burdened. #### Bottom Line For Section 8-focused investors, ZIP code 79907 presents a mixed picture. While the demand for rental properties is strong, the high price-to-FMR ratio makes it challenging to achieve positive cash flow purely through Section 8 vouchers. Therefore, the recommendation is to **Skip** focusing exclusively on Section 8 vouchers in this ZIP code. Instead, investors should consider a diversified approach that includes market-rate tenants to ensure better financial performance and stability.

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.