Section 8 Fair Market Rent (FMR) for ZIP 90220 - 2027

Investment Score for ZIP 90220

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	$1,750
1 Bedroom	$1,950
2 Bedrooms	$2,410
3 Bedrooms	$3,060
4 Bedrooms	$3,420
5 Bedrooms	$3,967
6 Bedrooms	$4,443
7 Bedrooms	$4,798
8 Bedrooms	$5,038

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	$1,950	$458,833	0.42%	F
2BR	$2,410	$576,622	0.42%	F
3BR	$3,060	$650,906	0.47%	F
4BR	$3,420	$700,191	0.49%	F
5BR	$3,967	$764,701	0.52%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90220 (Compton, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90220 is set by HUD for 2026 as follows: - 0BR: $1480 - 1BR: $1660 - 2BR: $2070 - 3BR: $2650 - 4BR: $2920 These figures represent the maximum amount that a Section 8 voucher holder can pay for rent in different unit sizes. However, it is important to note that the actual rents in the area may exceed these FMRs. For instance, the Zillow median price for a 2BR property is $573,822, which translates to a monthly mortgage payment significantly higher than the FMR. The price-to-FMR ratio for a 2BR unit is 23.1x, indicating that the median home value is much higher than what a Section 8 voucher would cover. This suggests that voucher holders face significant constraints in finding affordable housing within the ZIP code. #### Affordability & Renter Profile ZIP code 90220 has a population of 48,354, with 38.5% of residents being renters. The occupancy rate is quite high at 95.7%, indicating a tight rental market where demand exceeds supply. Given the median household income of $82,335, the affordability of housing is a critical issue. The FMR for a 2BR unit is $2070, which represents 30.2% of the median income. This means that a significant portion of the population could struggle to afford housing without assistance, especially considering the high price-to-FMR ratio. The high occupancy rate and the percentage of renters suggest that there is a strong demand for rental properties in the area. However, the limited number of units available at or below the FMR indicates that the market is undersupplied with affordable options. This tight market condition makes it challenging for low-income households to find suitable housing, particularly those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code presents both opportunities and challenges. The FMRs are set to ensure that housing remains affordable for low-income families, but the actual rents in the area are likely to be higher due to the tight market conditions. For example, the Zillow median price for a 2BR unit is $573,822, which implies a monthly mortgage payment well above the FMR of $2070. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the potential rental income versus the cost of ownership. If a property owner is able to secure a tenant using a Section 8 voucher, they would receive $2070 per month for a 2BR unit. However, given the high median home values, the mortgage payments alone would likely exceed this amount. Additionally, property taxes, insurance, maintenance, and other costs must be factored into the equation. Assuming a conservative estimate of a 4% interest rate and a 20% down payment, the monthly mortgage payment for a $573,822 home would be approximately $2,770. This already exceeds the FMR for a 2BR unit, making it difficult to achieve positive cash flow without additional subsidies or higher rent payments from tenants who do not rely solely on vouchers. Given these factors, the investment grade for this ZIP code would be considered low for Section 8-focused investors. The high cost of acquiring and maintaining properties, combined with the limited rental income covered by FMR, suggests that returns may be minimal or negative. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should focus on smaller units such as 0BR or 1BR apartments, where the FMR is lower ($1480 and $1660 respectively). These units are more likely to generate positive cash flow compared to larger units, given the high price-to-FMR ratio. 2. **Seek Out Affordable Properties**: To achieve positive cash flow, investors should look for properties priced significantly below the median value of $573,822. For instance, a 2BR property priced at around $400,000 would have a monthly mortgage payment of approximately $1,900, which is closer to the FMR of $2070. 3. **Consider Alternative Funding Sources**: Given the high cost of properties, investors might want to explore alternative funding sources such as grants, tax credits, or partnerships with local government agencies to offset some of the costs and improve profitability. #### Bottom Line For Section 8-focused investors, the ZIP code 90220 (Compton, CA) is recommended to **skip**. The high price-to-FMR ratio and the limited rental income covered by FMR make it challenging to achieve positive cash flow. While there is a strong demand for rental properties, the tight market and high property values suggest that the investment risk outweighs the potential returns. Investors looking to enter this market should carefully evaluate their financial strategies and consider alternative areas with more favorable price-to-FMR ratios and lower acquisition 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.