Section 8 Fair Market Rent (FMR) for ZIP 90638 - 2027

Investment Score for ZIP 90638

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	$2,480
1 Bedroom	$2,770
2 Bedrooms	$3,410
3 Bedrooms	$4,330
4 Bedrooms	$4,850
5 Bedrooms	$5,626
6 Bedrooms	$6,301
7 Bedrooms	$6,805
8 Bedrooms	$7,145

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	$2,770	$435,904	0.64%	D
2BR	$3,410	$612,594	0.56%	F
3BR	$4,330	$862,951	0.5%	F
4BR	$4,850	$941,597	0.52%	F
5BR	$5,626	$1,170,540	0.48%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 90638 (La Mirada, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for La Mirada, CA (ZIP 90638), as per the 2026 data, is set at $2980 for a two-bedroom unit. This amount represents 32.6% of the median household income in the area, which stands at $109,649. The FMR is designed to reflect the average rent for a modest apartment in the area, but it often falls short of actual market rents. For instance, the Zillow median price for a two-bedroom home in this ZIP code is $609,673, which translates to a rental value that is significantly higher than the FMR. The price-to-FMR ratio for a two-bedroom unit is 17.0x, meaning that the actual rental price is approximately 17 times the FMR. This stark difference indicates that landlords who accept Section 8 vouchers face significant constraints, as they cannot charge the market rate and must adhere to the lower FMR. Consequently, voucher holders are limited in their ability to find suitable housing, as many units will be priced well above the FMR. #### Affordability & Renter Profile In La Mirada, 23.8% of the population are renters, and the occupancy rate is a robust 97.5%, suggesting a tight rental market. Given the high occupancy rate and the relatively low percentage of renters, it is clear that there is strong demand for rental properties in this area. However, the affordability of these rentals is questionable due to the high price-to-FMR ratio. The median household income of $109,649 suggests that the typical resident has a relatively high income, making it challenging for those relying on Section 8 vouchers to compete in the rental market. The FMR for a three-bedroom unit is $3780, which is still only 34.5% of the median income, indicating that even families with larger incomes might struggle to afford market-rate rentals. #### Investor Angle From an investor perspective, accepting Section 8 vouchers in La Mirada would likely result in a negative cash flow. With the FMR for a two-bedroom unit at $2980, and the actual market rental price being approximately 17 times higher, the gap between what investors can charge and what they must accept is substantial. To illustrate, if an investor were to purchase a two-bedroom property at the median price of $609,673, and then rent it out at the FMR, they would be charging far below the market rate. Assuming a conservative mortgage payment of around $2500 per month (based on a 30-year fixed-rate mortgage at 4%), the landlord would be left with very little profit after covering other expenses such as maintenance, insurance, and property taxes. Given these dynamics, the investment grade for this ZIP code from a Section 8-focused perspective is low. The constraints imposed by the FMR make it difficult for investors to achieve positive cash flow, especially when compared to the high median property values. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider focusing on smaller units like studios or one-bedroom apartments. The FMR for a one-bedroom unit is $2390, which is still below the market rate but offers a slightly better opportunity for positive cash flow. 2. **Seek Out-of-Voucher Options**: Investors looking to maximize returns should explore opportunities outside of the Section 8 voucher program. By targeting the broader rental market, they can potentially charge closer to the actual market rates, which are much higher than the FMR. #### Bottom Line For Section 8-focused investors, the recommendation is to **skip** this ZIP code. The high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow while adhering to the FMR guidelines. Instead, investors should look for areas with a more favorable balance between FMR and market rents, where they can better manage their investments and achieve financial sustainability.

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.