Section 8 Fair Market Rent (FMR) for ZIP 92605 - 2027

FY 2027 Fair Market Rent Rates

The economics of Section 8 housing in ZIP code 92605, which encompasses parts of Santa Ana, Anaheim, and Irvine in Orange County, California, can be quite favorable for landlords but requires an understanding of the SAFMR (Specific Area Fair Market Rent) and how it interacts with the local rental market.

The SAFMR for a two-bedroom apartment in ZIP 92605 for fiscal year 2024 is set at $2780. This figure represents the maximum amount that the housing authority will pay towards the rent of a two-bedroom unit under the Section 8 program. However, it's important to note that local market rents are currently not available, which means landlords must rely on the SAFMR to gauge the financial viability of accepting Section 8 tenants.

A voucher payment under Section 8 consists of two primary components: the subsidy paid by the housing authority and the tenant's portion of the rent. The tenant is typically responsible for paying 30% of their adjusted income towards rent, plus any applicable utility allowances. For instance, if a tenant's adjusted income is $1800 per month, they would contribute $540 towards rent, assuming a standard 30% contribution rate. The housing authority then covers the remaining portion up to the SAFMR limit of $2780.

In practice, this means that if a landlord sets the rent at the SAFMR rate of $2780, the total rent received would be the sum of the tenant's contribution and the housing authority's subsidy. Using our example, the landlord would receive $540 from the tenant and $2240 from the housing authority, totaling $2780. Utility allowances vary but generally do not exceed a few hundred dollars per month, so they should be considered as additional income.

The SAFMR rate being set specifically for ZIP 92605 means that it reflects the rental conditions unique to this area, rather than a broader metro or county average. This specificity can help landlords make more informed decisions about pricing their units and whether to accept Section 8 vouchers.

To determine the reimbursement gap or surplus, landlords need to compare the SAFMR rate with their own market rent. Since local market rents are not available, landlords should conduct their own research to find out what similar properties are renting for in ZIP 92605. If the market rent is higher than $2780, there will be a gap between the market rate and the voucher reimbursement, meaning landlords might receive less than they could from non-voucher tenants. Conversely, if the market rent is lower, landlords might see a surplus when accepting Section 8 tenants.

Given the SAFMR rate of $2780, landlords should expect to receive this amount in total rent, with the tenant contributing a portion based on their income. The reimbursement gap or surplus will depend on the actual market conditions in ZIP 92605, which landlords must assess independently to understand their potential earnings from a Section 8 tenant.

Data Sources: FMR data from HUD (2027).

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.