Location: Los Angeles-Long Beach-Glendale, CA | Metro: Los Angeles-Long Beach-Glendale, CA HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,000 |
| 1 Bedroom | $2,240 |
| 2 Bedrooms | $2,760 |
| 3 Bedrooms | $3,500 |
| 4 Bedrooms | $3,920 |
| 5 Bedrooms | $4,547 |
| 6 Bedrooms | $5,093 |
| 7 Bedrooms | $5,500 |
| 8 Bedrooms | $5,775 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,240 | $472,686 | 0.47% | F |
| 2BR | $2,760 | $674,462 | 0.41% | F |
| 3BR | $3,500 | $805,935 | 0.43% | F |
| 4BR | $3,920 | $957,124 | 0.41% | F |
| 5BR | $4,547 | $1,077,734 | 0.42% | F |
U.S. Census Bureau data (2024)
Montebello, zip code 90640, presents a classic inner-ring suburban dynamic within Los Angeles County, characterized by a diverse housing stock and convenient connectivity to the broader metro area. The city offers a blend of established single-family neighborhoods and commercial corridors, with the Montebello Town Center serving as a major retail hub and a significant local employer. The community retains a distinct residential feel while providing residents relatively quick access to downtown Los Angeles and surrounding industrial centers via the 60 freeway. This balance of suburbia and transit access makes it a practical location for working-class renters seeking stability without paying prime city prices.
From a financial perspective, the data reveals a specific opportunity cost for landlords participating in the HUD program. The FY2026 Fair Market Rent (FMR) for a two-bedroom unit is set at $2,390, which essentially matches the current market rent of $2,366 reported by Zillow. For investors calculating cash flow, this means the gap is negligible at just $24, meaning you are not sacrificing market rate to accept a voucher. However, acquisition costs are substantial, with a median home value of $827,408 and a median 2BR sales price of $679,803. Properties are moving moderately fast, with a median of 48 days on market, indicating a competitive but not overheated environment.
Demand drivers in this area are anchored by the local renter population, which comprises 53.8% of households, and a median household income of $79,625. This income level suggests that while many residents are stable, a significant portion may still require rental assistance due to the high cost of living in the Los Angeles metro area. The city’s public school system, including Montebello High School, and local parks serve as key amenities for families. Furthermore, the transit availability along major thoroughfares supports a workforce that relies on public transportation, further supporting the need for accessible, affordable multi-family housing units.
The Section 8 verdict for Montebello 90640 leans heavily toward stability over immediate cash-flow spikes. Because the FMR ($2,390) aligns almost perfectly with market rents ($2,366), landlords can secure government-backed payments without leaving money on the table. Given the high cost of entry—over $679,000 for a typical two-bedroom property—the primary investor angle here is long-term appreciation and occupancy security. With a majority renter population and reliable demand, this ZIP code is best suited for investors seeking to minimize vacancy risk in a high-value market rather than chasing deep discounts.
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.