Location: Santa Ana-Anaheim-Irvine, CA | Metro: Santa Ana-Anaheim-Irvine, 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 | $2,690 |
| 1 Bedroom | $2,720 |
| 2 Bedrooms | $3,190 |
| 3 Bedrooms | $4,330 |
| 4 Bedrooms | $5,180 |
| 5 Bedrooms | $6,009 |
| 6 Bedrooms | $6,730 |
| 7 Bedrooms | $7,268 |
| 8 Bedrooms | $7,631 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $4,330 | $2,135,388 | 0.2% | F |
U.S. Census Bureau data (2024)
Skeptical investors looking into ZIP 90742 may have several concerns regarding the feasibility of participating in the Section 8 housing program. Let's address these concerns with the available data.
The first objection might be whether the Fair Market Rent (FMR) of $2,730 for ZIP 90742 in fiscal year 2024 will sufficiently cover the mortgage on a property valued at $2,142,509. To evaluate this, we need to consider the typical mortgage rate and term. Assuming a standard 30-year fixed-rate mortgage at an average rate of around 4%, the monthly mortgage payment for a property of that value would be approximately $10,250. Clearly, the FMR of $2,730 does not cover the mortgage payment, which suggests that relying solely on FMR may not be financially viable without additional income sources or subsidies.
A second concern could be the level of renter demand, which stands at 62.5%. This figure indicates that a significant portion of the rental market is occupied, but it leaves room for skepticism about the competition among landlords and the ease of filling vacancies. While a 62.5% occupancy rate is generally considered healthy, it is important to note that demand can fluctuate based on economic conditions, local employment rates, and other factors. The data does not provide a complete picture of the supply-side dynamics, such as the number of competing units or the vacancy rate, which would be crucial for a more comprehensive assessment.
The final objection relates to the ability of Section 8 vouchers to keep up with market rents, which are currently at $2,410. Given that the FMR is set at $2,730, it might seem that vouchers could potentially cover a substantial portion of market rents. However, the actual voucher amount can vary based on the size of the unit and the specific circumstances of the tenant. Moreover, the FMR is adjusted annually and may not always align perfectly with market trends. Therefore, while the FMR is close to market rents, it cannot be guaranteed that vouchers will consistently cover the full market rent, especially for higher-end properties.
In conclusion, while ZIP 90742 presents opportunities for landlords and small-portfolio investors through its FMR and occupancy rates, these factors alone do not guarantee financial success in the Section 8 program. Careful consideration of mortgage payments, competition, and the variability of voucher amounts is necessary before making any investment decisions.
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.