Section 8 Fair Market Rent (FMR) for ZIP 92374 - 2027

Investment Score for ZIP 92374

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	$1,830
1 Bedroom	$1,950
2 Bedrooms	$2,400
3 Bedrooms	$3,160
4 Bedrooms	$3,810
5 Bedrooms	$4,420
6 Bedrooms	$4,950
7 Bedrooms	$5,346
8 Bedrooms	$5,613

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
2BR	$2,400	$415,682	0.58%	F
3BR	$3,160	$554,488	0.57%	F
4BR	$3,810	$649,449	0.59%	F
5BR	$4,420	$795,532	0.56%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 92374 (Redlands, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 92374 is set by HUD for 2026. The FMRs are as follows: - 0BR: $1940 - 1BR: $2030 - 2BR: $2520 (29.4% of median income) - 3BR: $3330 - 4BR: $4020 To understand how these FMRs compare to actual rents, we need to consider the price-to-FMR ratio. For a 2BR unit, Zillow reports a median price of $417,423, which translates to a price-to-FMR ratio of 13.8x. This indicates that the actual rent prices are significantly higher than the FMRs, suggesting that voucher holders face substantial constraints in finding affordable housing. The FMR for a 2BR unit is $2520, but the actual median rent is likely much higher given the high price-to-FMR ratio. This makes it challenging for Section 8 voucher holders to find units that landlords will accept at the FMR rate. #### Affordability & Renter Profile ZIP code 92374 has a population of 45,262, with 42.3% of residents being renters. The occupancy rate stands at 96.5%, indicating a tight rental market with limited availability. Given the median household income of $102,813, the 2BR FMR of $2520 represents 29.4% of the median income, which is a reasonable percentage for affordability. However, the actual median rent for a 2BR unit is expected to be around $34,956 annually ($2520 * 13.8), making it difficult for lower-income households to afford housing without assistance. The renter profile in Redlands is diverse, including young professionals, families, and students. With a significant portion of the population renting, there is a strong demand for affordable housing options. However, the high price-to-FMR ratio suggests that the market is oversupplied with units priced beyond what many renters can afford, particularly those relying on Section 8 vouchers. #### Investor Angle From an investor's perspective, the ZIP code 92374 offers mixed opportunities. While the FMRs provide a baseline for rental pricing, the actual market rents are considerably higher. For instance, a 2BR unit would generate an annual income of $30,240 at the FMR rate ($2520 * 12). However, if the actual market rent is closer to the Zillow median, the annual income would be approximately $34,956. To determine if this ZIP code is cash-flow positive at the FMR rate, we must consider the typical costs associated with property ownership. These include mortgage payments, property taxes, insurance, maintenance, and other expenses. Assuming a conservative estimate of 1% of the median home value for annual property taxes and insurance, the cost would be around $4,174.23 per year. Maintenance and other miscellaneous expenses could add another $2,000 annually, bringing the total estimated annual expenses to about $6,174.23. Given these expenses, the net cash flow at the FMR rate would be approximately $24,065.77 annually ($30,240 - $6,174.23). This suggests that while the market is tight, properties rented at the FMR rate may still be profitable for investors, albeit with a smaller margin compared to market rates. In terms of investment grade, ZIP code 92374 appears to be a moderate risk. The high demand for rentals and the relatively high median income support a stable rental market. However, the challenge lies in attracting tenants who can pay market rates or landlords willing to accept the lower FMR rates. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should seek out properties where the rent is below the FMR rate. For example, a 2BR unit priced at $2200 per month would be more attractive to voucher holders and potentially easier to lease. This would also allow for some flexibility in negotiating with landlords who might be hesitant to accept the FMR rate. 2. **Consider Property Value Appreciation**: Given the high price-to-FMR ratio, there is potential for property values to appreciate further. Investors might consider purchasing properties at or slightly above the FMR rate, with the expectation that they can increase the rent over time as the market continues to tighten. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help streamline the process of leasing properties to Section 8 voucher holders. This can reduce the administrative burden and increase the likelihood of securing long-term tenants. #### Bottom Line For Section 8-focused investors, ZIP code 92374 presents a moderately challenging environment due to the high price-to-FMR ratio. While the market is tight and there is a significant demand for rentals, the actual rents far exceed the FMRs, making it difficult to find units that landlords will accept at the FMR rate. **Recommendation**: **Hold**. Investors should maintain their current positions in this ZIP code, as the market remains stable with high demand. However, they should be cautious about new investments unless they can secure units at or below the FMR rate. Engaging with local housing authorities and focusing on units with below-market rents can improve the chances of success in this area.

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.