Section 8 Fair Market Rent (FMR) for ZIP 90045 - 2027

Investment Score for ZIP 90045

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	$3,160
1 Bedroom	$3,530
2 Bedrooms	$4,360
3 Bedrooms	$5,530
4 Bedrooms	$6,190
5 Bedrooms	$7,180
6 Bedrooms	$8,042
7 Bedrooms	$8,685
8 Bedrooms	$9,119

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	$3,530	$450,647	0.78%	D
2BR	$4,360	$1,035,506	0.42%	F
3BR	$5,530	$1,424,757	0.39%	F
4BR	$6,190	$1,767,201	0.35%	F
5BR	$7,180	$2,358,277	0.3%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90045 (Los Angeles, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90045 in Los Angeles, California, is set by HUD for the year 2026. The FMRs are as follows: - 0BR: $2700 - 1BR: $3020 - 2BR: $3770 (which represents 33.5% of the median household income) - 3BR: $4780 - 4BR: $5320 These figures represent the maximum rent that a Section 8 voucher holder can pay. However, comparing these to actual rental prices reveals significant disparities. For instance, the Zillow median price for a 2BR unit is $1,058,390, which translates to a monthly mortgage payment of approximately $4,326 (assuming a 4.5% interest rate and a 20% down payment). This means that even if a property owner were to rent out a 2BR unit at the FMR, they would still be significantly below the cost of ownership. Given that the FMR for a 2BR unit is only $3770, it is clear that there is a substantial gap between what voucher holders can afford and the actual market rent. This gap creates a significant constraint for voucher holders, limiting their ability to find suitable housing within the ZIP code. #### Affordability & Renter Profile ZIP code 90045 has a population of 41,786, with 52.8% of residents being renters. The occupancy rate stands at 90.3%, indicating a robust demand for rental properties. Given the median household income of $135,032, the FMR for a 2BR unit represents 33.5% of the median income, which is a relatively high percentage. This suggests that many renters, including those with Section 8 vouchers, will struggle to find affordable housing. The high price-to-FMR ratio of 23.4x further underscores the tightness of the market. This ratio indicates that the median home value is over 23 times the FMR for a 2BR unit, making it extremely challenging for low-income renters to find homes that fit within their budget. Consequently, this ZIP code is characterized by a highly competitive rental market, where affordability is a significant issue. #### Investor Angle From an investor perspective, the FMRs provide a benchmark for potential rental income. However, the actual cash flow generated by renting at these rates must be considered against the costs of ownership. For a 2BR unit, the Zillow median price of $1,058,390 implies a monthly mortgage payment of around $4,326. Even if we assume a lower interest rate and higher down payment, the cost of ownership would still exceed the FMR. To determine whether this ZIP code is cash-flow positive at FMR, we need to consider additional factors such as property taxes, insurance, maintenance, and vacancy rates. Assuming a conservative estimate of 1% annual property tax ($10,584), 0.5% annual insurance ($5,292), and 1% annual maintenance ($10,584), the total annual cost would be approximately $26,460. Dividing this by 12 gives a monthly cost of about $2,205. Adding this to the mortgage payment yields a total monthly cost of $6,531, which is far above the FMR of $3770 for a 2BR unit. Therefore, renting at FMR would not be cash-flow positive for most investors. The investment grade for this ZIP code would likely be rated as low due to the mismatch between rental income and ownership costs. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should focus on smaller units, such as 0BR or 1BR, where the FMR is lower. For example, a 0BR unit with an FMR of $2700 might be more feasible for cash flow, especially if the property is priced below the median value. This could involve converting larger units into smaller ones or developing micro-apartments. 2. **Consider Alternative Funding Sources**: Given the high cost of ownership relative to rental income, investors might need to explore alternative funding sources beyond traditional mortgages. Options could include hard money loans, private financing, or government programs aimed at affordable housing development. 3. **Target Areas with Lower Property Values**: Within ZIP code 90045, there may be pockets or neighborhoods where property values are lower than the overall median. Identifying these areas could help investors find properties that are more aligned with the FMR, thereby improving cash flow. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 90045 is to **skip** this market. The high property values and the significant gap between FMR and actual rents make it difficult to achieve positive cash flow. Additionally, the tight market conditions and high occupancy rates suggest limited opportunities for acquiring properties at a price that would support Section 8 rents. Investors should look for other ZIP codes with more favorable price-to-FMR ratios and lower property values to maximize their chances of success.

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.