Section 8 Fair Market Rent (FMR) for ZIP 90241 - 2027

Investment Score for ZIP 90241

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	$2,200
1 Bedroom	$2,460
2 Bedrooms	$3,030
3 Bedrooms	$3,840
4 Bedrooms	$4,300
5 Bedrooms	$4,988
6 Bedrooms	$5,587
7 Bedrooms	$6,034
8 Bedrooms	$6,336

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	$2,460	$327,028	0.75%	D
2BR	$3,030	$783,658	0.39%	F
3BR	$3,840	$926,731	0.41%	F
4BR	$4,300	$1,071,036	0.4%	F
5BR	$4,988	$1,463,428	0.34%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90241 (Downey, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 90241 is set by HUD for 2026, with the following rates: - 0BR: $1830 - 1BR: $2040 - 2BR: $2550 (which represents 34.8% of the median household income) - 3BR: $3230 - 4BR: $3600 These FMRs represent the maximum rent that a Section 8 voucher holder can pay. However, comparing these figures to actual rents reveals significant disparities. For instance, the Zillow median price for a 2BR property in Downey is $783,010, which translates to a monthly mortgage payment far exceeding the FMR. The price-to-FMR ratio for a 2BR unit is 25.6x, indicating that the actual rental market is much higher than the FMR. This suggests that voucher holders face substantial constraints in finding affordable housing within their budget. #### Affordability & Renter Profile ZIP code 90241 has a population of 45,319, with 58.3% of residents being renters. The occupancy rate stands at 96.7%, indicating a very tight rental market. Given that the median household income is $88,006, the affordability of housing becomes a critical issue. The FMR for a 2BR unit is $2550, which is only 34.8% of the median income. This implies that many residents, particularly those relying on Section 8 vouchers, struggle to find housing that fits within their financial means. With such a high percentage of renters and a tight occupancy rate, it is clear that the demand for rental properties significantly outstrips supply. This makes it challenging for low-income households to secure housing, especially when the actual rental prices are so much higher than the FMR. #### Investor Angle From an investor perspective, the key question is whether renting at FMR levels can generate positive cash flow. Given the high Zillow median price for a 2BR unit ($783,010), the actual rental rates would likely be well above the FMR. However, if an investor were to focus solely on Section 8 tenants, they would need to adhere strictly to the FMR guidelines. The FMR for a 2BR unit is $2550, while the median Zillow price suggests a potential rental rate much higher. Assuming a conservative estimate of 1.5% of the median price as a monthly rental rate, the expected rent for a 2BR unit would be around $11,745 per month. This is nearly five times the FMR, making it highly unlikely for an investor to achieve positive cash flow by renting exclusively to Section 8 voucher holders. In terms of investment grade, the high price-to-FMR ratio indicates a speculative market. Investors looking to capitalize on the high demand for rentals might find opportunities outside the Section 8 program, but sticking to FMR levels would result in negative cash flow due to the high cost of acquisition and maintenance. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should consider acquiring properties where the actual rent is below the FMR. For example, a 2BR unit renting for $2500 or less could potentially attract Section 8 voucher holders without significant financial loss. This strategy would require careful selection of units in areas where rents are naturally lower. 2. **Diversify Tenant Base**: Given the high price-to-FMR ratio, it is advisable for investors to diversify their tenant base beyond just Section 8 voucher holders. They could target middle-income renters who can afford higher rents, thereby balancing the portfolio and ensuring better cash flow. 3. **Consider Renovation Projects**: Investors might look into renovation projects where they can bring older properties up to standard and still keep rents within the FMR range. This could involve purchasing properties at a lower price point and then improving them to meet modern standards while keeping costs down. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors in ZIP code 90241 is to **skip** this area. The actual rental prices far exceed the FMR, making it difficult to achieve positive cash flow by renting exclusively to voucher holders. Additionally, the high demand for rentals suggests that there is limited availability of units that fall within the FMR range, further complicating the investment strategy. Investors seeking to enter the Downey market should either diversify their tenant base or look for other ZIP codes with more favorable price-to-FMR ratios. In summary, the current market dynamics in 90241 do not support a purely Section 8-focused investment approach.

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.