Section 8 Fair Market Rent (FMR) for ZIP 90221 - 2027

Investment Score for ZIP 90221

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	$1,760
1 Bedroom	$1,970
2 Bedrooms	$2,430
3 Bedrooms	$3,080
4 Bedrooms	$3,450
5 Bedrooms	$4,002
6 Bedrooms	$4,482
7 Bedrooms	$4,841
8 Bedrooms	$5,083

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	$1,970	$495,865	0.4%	F
2BR	$2,430	$601,481	0.4%	F
3BR	$3,080	$670,298	0.46%	F
4BR	$3,450	$726,158	0.48%	F
5BR	$4,002	$777,032	0.52%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90221 (Compton, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90221, as set by HUD for 2026, is $2090 for a two-bedroom unit. This represents 34.4% of the median household income in Compton, which stands at $72,937. The FMR is designed to ensure that rent is affordable for low-income families, but it is crucial to understand how these figures compare to actual rental prices in the area. Actual rents in the market can be significantly higher than the FMR. For instance, Zillow reports the median price for a two-bedroom home in 90221 as $596,297. However, the FMR is a guideline for rental assistance programs, not for purchase prices. The price-to-FMR ratio of 23.8x indicates that the median home value is much higher than the rental costs covered by vouchers. This suggests that voucher holders face significant constraints in finding housing that meets their needs within the FMR limits. #### Affordability & Renter Profile With a population of 50,659 and a 49.0% renter rate, Compton has a substantial number of renters. The occupancy rate of 96.3% implies that the housing market is relatively tight, with few vacancies available. Given that 49.0% of residents are renters, and considering the median household income, it is likely that many residents rely on rental assistance programs like Section 8 to afford housing. The median household income of $72,937 places Compton in a middle-income bracket relative to other areas in Los Angeles County. However, the FMR for a two-bedroom unit at $2090 is only 34.4% of this median income, indicating that a significant portion of the population may struggle to find affordable housing without assistance. This tight market condition means that landlords have considerable leverage in setting rental prices, which could lead to rents exceeding the FMR limits. #### Investor Angle From an investor perspective, the ZIP code 90221 offers mixed prospects. The FMR for a two-bedroom unit is $2090, but the actual median rental price is likely higher due to the tight market conditions. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical rental rates and the cost of acquiring and maintaining properties. Given the high price-to-FMR ratio of 23.8x, it is clear that the median home values far exceed the rental costs covered by vouchers. However, for rental properties, the FMR provides a baseline for what tenants can pay with assistance. If an investor acquires a property at or below the FMR levels, they could potentially achieve positive cash flow, especially if they manage to keep operating costs low. The investment grade for this ZIP code would depend on several factors, including the ability to attract and retain tenants, the stability of the local economy, and the overall demand for rental units. With a high occupancy rate and a significant portion of the population relying on rental assistance, there is a strong demand for affordable housing. However, the challenge lies in finding properties that can be rented out at or near the FMR levels while still generating a profit. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors should focus on acquiring properties that are priced close to or below the FMR levels. For example, a two-bedroom unit priced at $2090 or less would be ideal for attracting Section 8 voucher holders. This strategy can help ensure steady tenant occupancy and positive cash flow. 2. **Consider Multi-Family Properties**: Given the high occupancy rate and the significant number of renters, multi-family properties might offer better returns. A building with multiple units, such as a small apartment complex, could provide a more stable income stream compared to single-family homes. Additionally, multi-family properties often benefit from economies of scale in terms of maintenance and management costs. 3. **Engage with Local Real Estate Agents**: To navigate the tight market effectively, investors should work closely with local real estate agents who have a deep understanding of the area. These agents can provide insights into the availability of affordable units and help identify properties that are likely to be rented out by voucher holders. #### Bottom Line For Section 8-focused investors, ZIP code 90221 presents both opportunities and challenges. While there is a strong demand for affordable housing and a high occupancy rate, the tight market conditions mean that rental prices can be higher than the FMR guidelines. Therefore, the recommendation is to **Hold** investments in this ZIP code until more affordable units become available. Investors should also be prepared to engage in detailed negotiations with landlords and tenants to ensure that properties meet the affordability criteria set by the FMR. In summary, the key points are: - FMR is significantly lower than median home values, making it challenging for voucher holders to find suitable housing. - The market is tight with a high occupancy rate, suggesting strong demand for rental units. - Investors should focus on affordable units and consider multi-family properties for better returns. - Engaging with local real estate agents can provide valuable insights into navigating the market. - The recommendation is to hold investments until more affordable units come onto the market.

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.