Section 8 Fair Market Rent (FMR) for ZIP 92127 - 2027

Investment Score for ZIP 92127

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	$2,650
1 Bedroom	$2,820
2 Bedrooms	$3,410
3 Bedrooms	$4,520
4 Bedrooms	$5,470
5 Bedrooms	$6,345
6 Bedrooms	$7,106
7 Bedrooms	$7,674
8 Bedrooms	$8,058

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	$2,820	$431,616	0.65%	D
2BR	$3,410	$617,650	0.55%	F
3BR	$4,520	$1,135,001	0.4%	F
4BR	$5,470	$1,724,060	0.32%	F
5BR	$6,345	$2,455,935	0.26%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 92127 (San Diego, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 92127, as set by HUD for 2026, is $3,610 for a two-bedroom unit. This represents 22.2% of the median household income of $195,520, which indicates that the rent is relatively affordable compared to the local income levels. However, the actual rental market in this area is significantly higher. The Zillow median price for a two-bedroom rental property is $652,378, which translates to a monthly rent of approximately $5,436 based on typical mortgage payments. This means the actual rent is about 15.1 times the FMR, creating a substantial gap between what voucher holders can afford and the market rates. Given these dynamics, voucher holders face significant constraints. For example, a three-bedroom unit has an FMR of $4,810, but the actual market rate would likely be much higher, making it difficult for families to find suitable housing within their budget. The disparity suggests that landlords who accept Section 8 vouchers may struggle to compete with those who do not, especially given the high occupancy rate of 96.7%, indicating a strong demand for housing. #### Affordability & Renter Profile ZIP code 92127 is characterized by a relatively affluent population, with a median household income of $195,520. Despite this, 26.6% of the population are renters, suggesting a diverse mix of residents including young professionals, students, and families. The high occupancy rate of 96.7% indicates that the housing market is tight, with limited availability and high competition among potential tenants. Given the high median income and the fact that only 22.2% of it is needed to cover the FMR for a two-bedroom unit, it is clear that the majority of residents can afford market-rate rentals. However, the significant portion of renters implies that there is still a segment of the population that relies on more affordable options, such as those offered through Section 8 vouchers. The challenge for this group lies in finding units that both meet their needs and fall within the voucher limits. #### Investor Angle From an investor's perspective, the ZIP code 92127 presents a mixed picture when considering Section 8-focused investments. Given the high market rates, properties rented at the FMR level would likely generate lower cash flows compared to market-rate rentals. For instance, a two-bedroom unit rented at the FMR of $3,610 would yield significantly less revenue than renting it at the market rate of around $5,436. However, the tight market conditions and high occupancy rate suggest that demand for rental properties is robust. Investors should consider the potential benefits of long-term stability and guaranteed rent payments from the government for Section 8 units. Additionally, the high median income and overall economic health of the area could provide a solid foundation for property values to appreciate over time, potentially offsetting lower rental yields. The investment grade for this ZIP code would be considered moderate to high risk due to the significant difference between FMR and market rates. Investors need to carefully weigh the trade-offs between immediate cash flow and long-term appreciation potential. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high market rates for larger units, investors might want to focus on smaller units like one-bedroom or studio apartments. The FMR for a one-bedroom unit is $2,960, which is still well below the market rate but offers a better chance of finding tenants willing to accept the voucher amount. 2. **Consider Renovation Projects**: Investors looking to enter the Section 8 market in 92127 could consider purchasing older properties that are currently underpriced relative to the FMR. By renovating these properties, they can bring them up to a standard that makes them attractive to voucher holders while also ensuring they are competitive in the broader rental market. 3. **Explore Government Programs**: Given the high cost of living, there may be additional government programs or incentives available to landlords who accept Section 8 vouchers. These could include tax breaks, grants, or other financial assistance that helps bridge the gap between FMR and market rates. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 92127 is to **Hold**. While the market is tight and demand is high, the significant gap between FMR and market rates makes it challenging to achieve positive cash flow without taking on additional risks or costs. Investors should carefully evaluate the potential for long-term appreciation and explore any available government programs to enhance the viability of their investments. The high median income and strong economic indicators suggest that property values are likely to remain stable or increase, providing a solid foundation for long-term investments. However, immediate cash flow will be a concern, and investors must be prepared to balance this against the benefits of stable tenancy and government-backed rent payments.

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.