Section 8 Fair Market Rent (FMR) for ZIP 92027 - 2027

Investment Score for ZIP 92027

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	$1,940
1 Bedroom	$2,070
2 Bedrooms	$2,500
3 Bedrooms	$3,310
4 Bedrooms	$4,010
5 Bedrooms	$4,652
6 Bedrooms	$5,210
7 Bedrooms	$5,627
8 Bedrooms	$5,908

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,070	$330,923	0.63%	D
2BR	$2,500	$510,532	0.49%	F
3BR	$3,310	$752,647	0.44%	F
4BR	$4,010	$892,561	0.45%	F
5BR	$4,652	$1,087,258	0.43%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 92027 (Escondido, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 92027 in Escondido, California, indicate that the maximum rent allowable under a Section 8 voucher for a two-bedroom unit is $2,670 per month. This figure represents 34.3% of the median household income in the area, which is $93,338. The actual rental market for two-bedroom units is significantly higher, with Zillow reporting a median price of $513,132, translating to a monthly rent of approximately $2,138 based on typical mortgage payments. However, the price-to-FMR ratio of 16.0x suggests that the actual market rent for two-bedroom units is likely much higher than the Zillow median, possibly around $42,720 annually or $3,560 monthly. This means that the FMR for a two-bedroom unit is well below the market rate, constraining voucher holders to a limited pool of available properties. For example, a three-bedroom unit has an FMR of $3,560, which is still lower than the likely market rent for such units. #### Affordability & Renter Profile In ZIP code 92027, 36.5% of the population are renters, indicating a significant demand for rental housing. With a high occupancy rate of 96.3%, it is clear that the rental market is tight, and there is little excess supply. Given the median household income of $93,338, many residents may struggle to afford market-rate rentals, especially for larger units. The FMR for a four-bedroom unit is $4,310, which is 46.2% of the median income, suggesting that families with multiple children might find it particularly challenging to secure affordable housing. The disparity between FMR and market rates highlights the affordability gap faced by low-income renters, making it essential for landlords to consider the potential benefits of accepting Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 92027 presents a mixed picture. While the market rent is significantly higher than the FMR, the tight rental market and high occupancy rate suggest strong demand for rental properties. However, the price-to-FMR ratio of 16.0x indicates that the actual market rent for a two-bedroom unit is approximately $42,720 annually, or $3,560 monthly, compared to the FMR of $2,670. This implies that investors who purchase properties at market rates would need to rely on non-voucher tenants to achieve cash flow positivity. For properties rented at FMR, the investment grade can be considered moderate. The FMR for a two-bedroom unit is $2,670, which is 28.6% of the median home value ($513,132). This suggests that while the rental income is lower than what could be achieved in the open market, it is still a reasonable return given the relatively high property values. Additionally, the stability and reliability of Section 8 vouchers can provide a consistent income stream, albeit at a lower rate than market rents. #### Specific Actionable Insights 1. **Target Smaller Units**: Investors should focus on acquiring smaller units, such as one-bedroom and studio apartments, where the FMR is closer to the market rent. For instance, the FMR for a one-bedroom unit is $2,190, which is only slightly below the likely market rent. This strategy can help maximize cash flow while still serving the needs of low-income renters. 2. **Consider Renovation Projects**: Properties that are currently priced above the FMR but have potential for renovation could be viable investments. By lowering the rent to meet FMR guidelines, these properties can attract Section 8 tenants while still offering a reasonable return on investment. For example, a four-bedroom unit with a market rent of $3,560 could be renovated and rented out at $4,310, which is the FMR for a four-bedroom unit. #### Bottom Line Given the tight rental market and the significant disparity between FMR and market rents, the recommendation for Section 8-focused investors is to **Hold**. While purchasing properties at market rates and renting them at FMR would result in negative cash flow, targeting smaller units or properties that can be renovated to meet FMR guidelines can provide a stable and moderate return. The high occupancy rate and significant number of renters in the area support the idea that there is a strong demand for affordable housing, making it a worthwhile investment for those willing to accept Section 8 vouchers.

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.