Location: El Paso, TX | Metro: El Paso, 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 | $780 |
| 1 Bedroom | $950 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,520 |
| 4 Bedrooms | $1,870 |
| 5 Bedrooms | $2,169 |
| 6 Bedrooms | $2,429 |
| 7 Bedrooms | $2,623 |
| 8 Bedrooms | $2,754 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,120 | $165,940 | 0.67% | D |
| 3BR | $1,520 | $234,871 | 0.65% | D |
| 4BR | $1,870 | $291,229 | 0.64% | D |
| 5BR | $2,169 | $366,122 | 0.59% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,130 for ZIP 79925 in El Paso, TX, for fiscal year 2024 will be sufficient to cover the mortgage on a home priced at $236,861. According to recent mortgage rates, which fluctuate but have been around 6% for a 30-year fixed-rate mortgage, the monthly principal and interest payment would be approximately $1,394. This means that the FMR of $1,130 would not cover the mortgage payment alone, leaving a shortfall of about $264 per month. However, this analysis does not consider potential tax benefits or other deductions that could reduce the effective cost of the mortgage.
The investor may also doubt the adequacy of rental demand in ZIP 79925, given that only 47.5% of housing units are renter-occupied. Recent data indicates that the median housing rent in this region is $838 per month, and the rental vacancy rate is 11.0%. These figures suggest that while the demand for rentals is not overwhelming, it is still present, and the vacancy rate is relatively high, indicating a competitive market. It's important to note that the FMR of $1,130 is higher than the median rent, which implies that there could be a segment of the rental market willing to pay closer to the FMR.
Another concern is whether Section 8 vouchers will keep pace with market rents, which are currently at $1,545. The FMR of $1,130 represents the 40th percentile of gross rents for standard-quality market-rate rental housing units, meaning that 60% of units are more expensive. In ZIP 79925, the voucher payment standard is lower than the market rent, which could make it challenging for landlords to participate in the program. However, the Housing Choice Voucher program aims to adjust its payment standards annually to reflect changes in the market. Investors should monitor these adjustments closely to ensure they align with their financial goals.
In summary, while the FMR of $1,130 for ZIP 79925 may not fully cover the mortgage on a $236,861 home, it does indicate a level of rental demand that could support investments. The rental vacancy rate of 11.0% suggests competition, but the median rent being below the FMR points to potential opportunities. Lastly, the discrepancy between market rents and voucher payment standards requires attention, but the program's annual adjustments provide a mechanism for keeping pace with rising costs.
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.