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 | $2,320 |
| 1 Bedroom | $2,590 |
| 2 Bedrooms | $3,200 |
| 3 Bedrooms | $4,060 |
| 4 Bedrooms | $4,540 |
| 5 Bedrooms | $5,266 |
| 6 Bedrooms | $5,898 |
| 7 Bedrooms | $6,370 |
| 8 Bedrooms | $6,689 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,590 | $769,901 | 0.34% | F |
| 2BR | $3,200 | $1,008,740 | 0.32% | F |
| 3BR | $4,060 | $1,272,253 | 0.32% | F |
| 4BR | $4,540 | $1,519,966 | 0.3% | F |
| 5BR | $5,266 | $1,698,001 | 0.31% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking at ZIP 91104 in Pasadena, California, might have several concerns regarding the feasibility of investing in properties through the Section 8 program. Here, we address those concerns with the available data.
Will Fair Market Rent (FMR) of $2,620 cover the mortgage on a $1,226,160 home?
The FMR of $2,620 for ZIP 91104 in fiscal year 2024 does not directly cover the mortgage on a $1,226,160 home. To provide a clearer picture, let's consider a typical 30-year fixed-rate mortgage at an average interest rate of 4%. The monthly payment for such a mortgage would be approximately $5,900, which is significantly higher than the FMR. However, it's important to note that the median home value in ZIP 91104 is lower, around $600,000, which would result in a more manageable mortgage payment. This highlights the need for careful property selection to ensure financial viability under Section 8 guidelines.
Is there enough renter demand at 44.6%?
The renter demand in ZIP 91104 stands at 44.6%, which is below the national average but still represents a substantial portion of the housing market. This percentage indicates that nearly half of the households in the area are renters, suggesting a reasonable level of demand. However, it's crucial to evaluate the local rental market dynamics, including vacancy rates and the competition from other rental properties, to determine if this demand translates into sufficient occupancy for Section 8 units.
Will vouchers keep pace with $2,570 market rents?
The question of whether vouchers will keep up with the market rent of $2,570 is critical for maintaining profitability. According to HUD data, the voucher amount for ZIP 91104 is set at $2,620, slightly above the current market rent. This suggests that vouchers can indeed cover the majority of market rents, although there might be fluctuations based on individual unit conditions and location. It's advisable to monitor the local housing authority's policies and any adjustments they make to voucher amounts over time to ensure continued alignment with market rents.
In conclusion, while the data provides some assurance on the ability of vouchers to cover market rents and the presence of a significant renter population, careful consideration must be given to the specifics of property acquisition costs and the broader rental market conditions in ZIP 91104. These factors collectively influence the overall success of a Section 8 investment strategy.
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.