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 | $2,250 |
| 1 Bedroom | $2,510 |
| 2 Bedrooms | $3,100 |
| 3 Bedrooms | $3,930 |
| 4 Bedrooms | $4,400 |
| 5 Bedrooms | $5,104 |
| 6 Bedrooms | $5,716 |
| 7 Bedrooms | $6,173 |
| 8 Bedrooms | $6,482 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,510 | $320,102 | 0.78% | D |
| 2BR | $3,100 | $493,703 | 0.63% | D |
| 3BR | $3,930 | $952,554 | 0.41% | F |
| 4BR | $4,400 | $1,773,493 | 0.25% | F |
| 5BR | $5,104 | $2,401,481 | 0.21% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $2,670 for ZIP 91356 in Los Angeles, CA, will sufficiently cover the mortgage on a home valued at $1,357,021. To address this, let's break down the numbers. Assuming a 30-year fixed-rate mortgage with an average interest rate of around 4.5%, the monthly payment on a loan of approximately $1,085,264.70 (after a 20% down payment) would be roughly $5,360. Clearly, the FMR does not cover the mortgage payment, indicating that additional income sources or higher rents are necessary.
The second objection could be whether there is sufficient renter demand at 42.0%. The data shows that 42.0% of households in ZIP 91356 rent their homes. This percentage suggests a moderate level of demand, but it's essential to consider the broader context. A deeper dive into the local rental market dynamics, such as job growth and population trends, would provide a clearer picture. However, with over 40% of households renting, there is a notable presence of renters in the area, which can support a rental business.
A final concern might be whether housing vouchers will keep pace with the market rents of $2,771. The voucher amount typically varies and is based on the local FMR. For ZIP 91356, the FMR is lower than the market rent, indicating that vouchers may not fully cover the cost of renting a property at market rates. Investors should be aware that relying solely on voucher payments might not be financially viable without additional subsidies or rent increases.
In conclusion, while the FMR of $2,670 is insufficient to cover the mortgage on a $1,357,021 home, there is a substantial base of renters in ZIP 91356. Yet, the gap between the voucher amount and market rents at $2,771 presents a challenge that requires careful consideration of financial strategies and possibly seeking alternative funding sources.
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.