Section 8 Fair Market Rent (FMR) for ZIP 90002 - 2027

Investment Score for ZIP 90002

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	$1,690
1 Bedroom	$1,890
2 Bedrooms	$2,330
3 Bedrooms	$2,960
4 Bedrooms	$3,310
5 Bedrooms	$3,840
6 Bedrooms	$4,301
7 Bedrooms	$4,645
8 Bedrooms	$4,877

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
1BR	$1,890	$472,145	0.4%	F
2BR	$2,330	$545,256	0.43%	F
3BR	$2,960	$608,770	0.49%	F
4BR	$3,310	$658,655	0.5%	F
5BR	$3,840	$718,941	0.53%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90002 (Los Angeles, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 90002 in 2026 indicate that a two-bedroom unit should rent for $2070. However, the actual rental market is significantly higher, with the Zillow median price for a two-bedroom unit being $541,520. This translates into a price-to-FMR ratio of 21.8x, meaning that the actual median price is over 21 times the FMR. For voucher holders, this creates significant constraints, as the voucher amount would cover only a small fraction of the actual rent. The FMR for a three-bedroom unit is $2650, which is still far below the actual market prices. Consequently, voucher holders are likely to struggle to find units within their budget, especially given the high occupancy rate of 95.4%, indicating a tight rental market. #### Affordability & Renter Profile ZIP code 90002 has a population of 52,122, with 60.8% of residents being renters. The median household income is $59,021, which means that a two-bedroom unit priced at $2070 represents 42.1% of the median income. This suggests that while some renters might be able to afford market rates, many are likely to be low-income individuals who rely on assistance programs like Section 8 vouchers. Given the high occupancy rate and the large percentage of renters, it is clear that the market is tight, with limited supply relative to demand. This tightness could exacerbate affordability issues, particularly for those who cannot afford market rates without subsidies. #### Investor Angle From an investor perspective, the FMR levels provide a benchmark for what the government considers reasonable rent for subsidized housing. However, the actual market prices are much higher, making it challenging for investors to achieve positive cash flow solely based on FMR. For instance, a two-bedroom unit renting at FMR ($2070) would generate less than 1/20th of the median market price ($541,520). This indicates that investors relying on FMR alone would face significant financial challenges. The investment grade in this area would likely be low due to the disparity between FMR and actual market prices, suggesting that returns on investment would be minimal unless the investor can secure units at or near FMR levels. #### Specific Actionable Insights 1. **Target Lower-Rent Units**: Investors should focus on securing properties that are priced closer to FMR levels. For example, targeting one-bedroom units at $1630 or even zero-bedroom units at $1440 could help ensure better cash flow. These units are more likely to be affordable for voucher holders and thus have a higher chance of being occupied under the Section 8 program. 2. **Consider Renovation Projects**: Given the high occupancy rate and the significant number of renters, there may be opportunities to purchase older, lower-priced properties and renovate them to meet FMR standards. This strategy could potentially yield a higher return if the renovated units can be rented out at FMR rates rather than market rates. 3. **Explore Government Programs**: Investors should explore additional government programs or incentives that might be available to offset the gap between FMR and market rates. For instance, certain tax credits or grants may be offered to landlords who participate in affordable housing initiatives, which could improve the overall profitability of Section 8 investments. #### Bottom Line Given the significant disparity between FMR and actual market prices, along with the tight rental market conditions, the recommendation for Section 8-focused investors is to **Skip** this ZIP code. The high price-to-FMR ratio makes it difficult to achieve positive cash flow, and the limited availability of units priced at or near FMR levels suggests that finding suitable properties will be challenging. While there may be opportunities for targeted investments in lower-rent units or through renovation projects, the overall market dynamics in ZIP 90002 do not favor Section 8-focused investors seeking strong returns.

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.