Section 8 Fair Market Rent (FMR) for ZIP 90025 - 2027

Investment Score for ZIP 90025

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	$3,180
1 Bedroom	$3,550
2 Bedrooms	$4,380
3 Bedrooms	$5,560
4 Bedrooms	$6,220
5 Bedrooms	$7,215
6 Bedrooms	$8,081
7 Bedrooms	$8,727
8 Bedrooms	$9,163

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	$3,550	$548,792	0.65%	D
2BR	$4,380	$909,531	0.48%	F
3BR	$5,560	$1,307,380	0.43%	F
4BR	$6,220	$2,116,121	0.29%	F
5BR	$7,215	$3,070,600	0.23%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90025 (Los Angeles, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90025 is set by HUD for 2026. For a two-bedroom apartment, the FMR is $3840 per month. This figure represents 44.4% of the median household income in the area, which stands at $103,894. However, the actual rental market is significantly higher. According to Zillow, the median price for a two-bedroom apartment in 90025 is $943,433, which translates to a monthly rent of approximately $7862 based on typical mortgage rates and property taxes. The price-to-FMR ratio is 20.5x, indicating that actual rents are much higher than the FMR. This creates significant constraints for Section 8 voucher holders. They can only afford apartments that cost up to $3840 per month, whereas the average two-bedroom apartment costs over $7800 per month. This means that voucher holders have limited options and may struggle to find suitable housing within their budget. #### Affordability & Renter Profile ZIP code 90025 has a high occupancy rate of 90.8%, suggesting that the housing market is tight and there is strong demand for rental units. With 75.9% of residents being renters, the area has a predominantly rental-focused population. Given the median household income of $103,894, most residents are likely middle to upper-middle class professionals who can afford the high rents. However, the disparity between the FMR and actual rents indicates that a significant portion of the population, particularly those relying on Section 8 vouchers, faces affordability challenges. The high occupancy rate and the large percentage of renters suggest that the market is well-supplied but still under pressure due to the high cost of living. The tightness of the market is further exacerbated by the limited availability of affordable units for low-income households. #### Investor Angle From an investor perspective, the ZIP code 90025 presents a challenging scenario when considering cash flow at the FMR level. At $3840 per month for a two-bedroom unit, the rental income is far below the actual market rate of around $7862 per month. This implies that investors would need to target properties that are priced closer to the FMR to achieve positive cash flow, which is difficult given the current market conditions. Investment grade in this ZIP code is likely to be lower due to the mismatch between FMR and actual rents. Investors looking to participate in the Section 8 market will need to carefully consider the potential for long-term occupancy and the likelihood of finding tenants willing to accept the lower rent levels. Additionally, the high median home value suggests that the area is primarily attractive to buyers rather than renters, which could limit the pool of potential Section 8 tenants. #### Specific Actionable Insights 1. **Target Affordable Units**: Investors should focus on acquiring properties that are priced closer to the FMR. For instance, a two-bedroom unit priced at $3840 per month would be more likely to attract Section 8 tenants. This strategy would also help mitigate the risk of vacancy and ensure steady cash flow. 2. **Consider Renovation Projects**: Given the high occupancy rate, there may be opportunities to purchase older, less expensive properties and renovate them to meet the FMR requirements. This approach could potentially yield higher returns if the renovated units can command rents slightly above the FMR while still attracting Section 8 tenants. 3. **Explore Government Programs**: Engage with local government programs aimed at increasing affordable housing. These programs often provide incentives such as tax breaks or grants to developers who build or maintain properties within FMR guidelines. Such initiatives could offset some of the financial risks associated with investing in the Section 8 market. #### Bottom Line For investors focused on the Section 8 market, ZIP code 90025 is generally not recommended. The significant gap between FMR and actual market rents makes it difficult to achieve positive cash flow. The tight market conditions and high median home values indicate that the area is more suited for traditional homeownership rather than affordable rentals. Therefore, the recommendation is to **Skip** this ZIP code for Section 8 investments unless you can identify specific opportunities that align closely with FMR guidelines and offer additional support through government programs. --- This analysis is based solely on the provided data and does not include any external research or assumptions beyond the given figures.

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.