Section 8 Fair Market Rent (FMR) for ZIP 90004 - 2027

Investment Score for ZIP 90004

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	$2,320
1 Bedroom	$2,590
2 Bedrooms	$3,190
3 Bedrooms	$4,050
4 Bedrooms	$4,530
5 Bedrooms	$5,255
6 Bedrooms	$5,886
7 Bedrooms	$6,357
8 Bedrooms	$6,675

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
1BR	$2,590	$588,717	0.44%	F
2BR	$3,190	$837,410	0.38%	F
3BR	$4,050	$1,370,616	0.3%	F
4BR	$4,530	$2,406,216	0.19%	F
5BR	$5,255	$3,884,170	0.14%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90004 (Los Angeles, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90004 in Los Angeles, California, as of 2026, is set at $2730 for a two-bedroom unit. This amount represents 50.5% of the median household income in the area, which stands at $64,826. However, the actual rent prices in the market are significantly higher. The Zillow median price for a two-bedroom rental property in 90004 is $855,644, leading to a price-to-FMR ratio of 26.1x. This means that the actual market rent for a two-bedroom unit is approximately $71,208 annually, compared to the FMR of $32,760 annually. For voucher holders, this creates a significant constraint as they would find it challenging to secure housing that meets their budgetary needs without substantial out-of-pocket expenses. The disparity between FMR and market rent suggests that voucher holders must often pay a large portion of their income towards rent, leaving little for other necessities. #### Affordability & Renter Profile ZIP code 90004 has a high occupancy rate of 92.0%, indicating that the market is tight and there is strong demand for rental properties. Additionally, 83.8% of the population are renters, which further underscores the importance of rental housing in this area. Given the median household income of $64,826, the majority of residents are likely to be low- to moderate-income individuals who rely heavily on affordable housing options. The fact that the FMR for a two-bedroom unit is only 50.5% of the median income highlights the affordability challenge faced by many residents. With such a high percentage of renters and limited supply of affordable units, the market is likely to remain competitive and potentially overpriced relative to what most residents can afford. #### Investor Angle From an investor perspective, the ZIP code 90004 presents a mixed picture when considering cash flow and investment grade. The FMR for a two-bedroom unit is $2730, but the actual market rent is $855,644, making the market extremely expensive. If an investor were to purchase a two-bedroom unit at the Zillow median price and rent it out at the FMR, the annual rent would be $32,760, which is far below the mortgage payment required for a property costing $855,644. Assuming a typical mortgage rate of around 4.5%, the annual mortgage payment would be approximately $77,000, leading to a negative cash flow of $44,240 per year. This makes the investment unattractive from a cash flow standpoint. However, the investment grade could still be favorable if we consider potential appreciation in property values and long-term rental income growth. In a highly desirable area like 90004, property values have historically appreciated, and there is a strong likelihood that rents will continue to rise due to the high demand and limited supply. Nonetheless, the immediate cash flow implications are negative, and the risk associated with relying solely on future appreciation is considerable. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors should focus on acquiring properties that are priced closer to the FMR rather than the Zillow median. This will ensure a better cash flow position and make the units more accessible to Section 8 voucher holders. For example, purchasing a two-bedroom unit for $327,600 (which is roughly 4x the FMR) would allow for renting it out at the FMR of $2730, resulting in a positive cash flow. 2. **Consider Multi-Family Properties**: Given the high rent-to-price ratio, single-family homes might not be the best investment option. Instead, multi-family properties could offer a more balanced approach. These properties typically have lower price-per-unit ratios and can provide more stable cash flows. An investor might look into purchasing a small apartment building where the average unit price is closer to the FMR. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 90004 is to **skip** this market. The extreme disparity between FMR and market rent prices makes it difficult to achieve positive cash flow, even with the high occupancy rate and significant renter population. While there is potential for long-term appreciation, the immediate financial burden of negative cash flow is too great to justify the investment. Investors should seek areas where the FMR is closer to the actual market rent to ensure a more sustainable and profitable investment strategy.

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.