Section 8 Fair Market Rent (FMR) for ZIP 91406 - 2027

Investment Score for ZIP 91406

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	$2,210
1 Bedroom	$2,470
2 Bedrooms	$3,050
3 Bedrooms	$3,870
4 Bedrooms	$4,330
5 Bedrooms	$5,023
6 Bedrooms	$5,626
7 Bedrooms	$6,076
8 Bedrooms	$6,380

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	$2,470	$348,541	0.71%	D
2BR	$3,050	$706,641	0.43%	F
3BR	$3,870	$849,238	0.46%	F
4BR	$4,330	$950,036	0.46%	F
5BR	$5,023	$1,107,083	0.45%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 91406 (Los Angeles, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 91406 is set by HUD for 2026. For a two-bedroom unit, the FMR is $2660, which represents approximately 40.7% of the median household income in the area ($78,429). This indicates that the rent is relatively affordable for the average household, but it also highlights the significant financial burden faced by low-income renters who rely on Section 8 vouchers. Actual rental prices in the market can be much higher. According to Zillow, the median price for a two-bedroom property is $712,627, which translates to a monthly mortgage payment of around $3000-$3500, depending on interest rates and terms. The price-to-FMR ratio for a two-bedroom unit is 22.3x, meaning that the market rent is significantly higher than the FMR. This creates a challenging situation for voucher holders, as they are limited to units that do not exceed the FMR. Given the high market rents, landlords might be disinclined to accept Section 8 vouchers, preferring to rent to tenants who can afford the higher market rates. #### Affordability & Renter Profile ZIP code 91406 has a population of 51,953, with 59.4% of residents being renters. This high percentage of renters suggests a strong demand for rental housing in the area. The occupancy rate of 96.9% further supports this notion, indicating that the market is tight and there is little vacancy. The median household income of $78,429 is relatively high, suggesting that many residents have the means to pay market rents. However, the significant portion of the population that relies on Section 8 vouchers underscores the importance of affordable housing options. Given the high market rents and the fact that 40.7% of the median income is allocated to a two-bedroom unit, it is clear that the market is quite tight for low-income renters. They would likely struggle to find suitable housing without assistance, making the availability of Section 8 vouchers crucial for maintaining a stable tenant base. #### Investor Angle From an investor perspective, the key question is whether properties can generate positive cash flow at the FMR levels. With the median price of a two-bedroom unit at $712,627, the monthly mortgage payment would be around $3000-$3500. To achieve positive cash flow, the rental income must exceed the mortgage payment plus other expenses such as maintenance, insurance, and property taxes. At the FMR of $2660 for a two-bedroom unit, the gap between the market rent and the FMR is substantial. Investors accepting Section 8 vouchers would need to ensure that their expenses are well-managed to avoid operating at a loss. Additionally, the lower rent levels associated with Section 8 vouchers could make it difficult to compete with market-rate rentals, potentially leading to longer vacancy periods and reduced demand from landlords. The investment grade for this ZIP code would be considered moderate to low due to the high market prices and the potential for negative cash flow when renting to voucher holders. Investors should carefully consider the financial implications before committing to properties in this area. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors might want to focus on smaller units like one-bedroom or studio apartments. The FMR for a one-bedroom unit is $2130, which is still a significant amount below the market rent. This could provide a better balance between affordability and cash flow. 2. **Seek Government Subsidies**: Investors looking to operate in this ZIP code should explore government subsidies and programs designed to support affordable housing. These subsidies can help bridge the gap between the FMR and the actual costs of owning and maintaining a rental property. 3. **Consider Location-Specific Strategies**: Since the market is tight, investors should look for properties in less desirable locations within the ZIP code where market rents might be slightly lower. This could include areas with less access to amenities or public transportation. Such strategies could help achieve positive cash flow while still serving the needs of low-income renters. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 91406 is to **skip**. The high market rents and the significant gap between the FMR and actual market prices make it challenging to achieve positive cash flow. Additionally, the tight market conditions suggest that landlords might prefer to rent to market-rate tenants rather than those with Section 8 vouchers. While there are opportunities in smaller units and less desirable locations, the overall financial risk and potential for negative cash flow outweigh the benefits for most investors targeting Section 8 vouchers.

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.