Section 8 Fair Market Rent (FMR) for ZIP 92626 - 2027

Investment Score for ZIP 92626

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	$2,900
1 Bedroom	$2,940
2 Bedrooms	$3,440
3 Bedrooms	$4,670
4 Bedrooms	$5,590
5 Bedrooms	$6,484
6 Bedrooms	$7,262
7 Bedrooms	$7,843
8 Bedrooms	$8,235

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	$3,440	$777,887	0.44%	F
3BR	$4,670	$1,363,012	0.34%	F
4BR	$5,590	$1,565,794	0.36%	F
5BR	$6,484	$1,842,240	0.35%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 92626 (Costa Mesa, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 92626, as per the 2026 data, is set at $3610 for a two-bedroom unit. This figure represents 37.9% of the median household income in Costa Mesa, which stands at $114,249. However, it is important to note that the actual rental market in Costa Mesa is significantly higher. The Zillow median price for a two-bedroom unit is $771,873, which translates to a price-to-FMR ratio of 17.8x. This means that the actual rent for a two-bedroom unit is likely much higher than the FMR, potentially making it challenging for Section 8 voucher holders to find suitable housing. Given that the FMR is only $3610 for a two-bedroom unit, landlords who accept Section 8 vouchers are constrained by the amount they can charge. In a market where the median price is so high, landlords might be hesitant to participate in the Section 8 program due to the lower rent ceilings compared to market rates. #### Affordability & Renter Profile ZIP code 92626 has a population of 50,708, with 59.2% of residents being renters. This indicates a strong rental market, but the occupancy rate of 94.7% suggests that there is little vacancy, making it a tight market. The high median household income of $114,249 implies that many residents have the financial capability to afford higher rents, but the significant percentage of renters (59.2%) also points to a substantial demand for affordable housing. The FMR for a three-bedroom unit is $4900, which is still below the typical market rates. Given the high median home value and the limited supply of units, it is likely that many renters are facing affordability challenges. The tight market conditions mean that there is a strong competition among renters, which could drive up rental prices further, exacerbating the issue for those relying on Section 8 vouchers. #### Investor Angle From an investor's perspective, the ZIP code 92626 presents a mixed picture. While the high median home values indicate a robust real estate market, the low FMR relative to these values poses a challenge for cash flow. For instance, a two-bedroom unit with an FMR of $3610 would generate significantly less revenue than the market rate, which is approximately $771,873 based on Zillow data. However, the high occupancy rate of 94.7% suggests that there is a steady demand for rental properties, which could provide some stability. The investment grade in this area would likely be considered moderate to high due to the strong economic indicators and population density. But the key consideration for investors is whether they can achieve positive cash flow while adhering to the FMR guidelines. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the cost of acquisition and maintenance. Given the high median home value, the acquisition costs would be quite high. If an investor were to purchase a property for around $771,873 and rent it out as a two-bedroom unit at the FMR of $3610, the annual rental income would be $43,320. Assuming a conservative estimate of 1% annual maintenance costs, the maintenance expenses would be around $7,718.73. Additionally, property taxes and other holding costs would need to be factored in. Based on these figures, achieving positive cash flow at FMR would be difficult unless the investor can secure a mortgage with very favorable terms or already owns the property outright. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom or studio apartments. These units typically have lower FMRs and may be more aligned with market rates. For example, the FMR for a one-bedroom unit is $3060, which is closer to potential market rents. 2. **Consider Location-Specific Strategies**: Within ZIP code 92626, certain areas may have lower median home values and thus more manageable acquisition costs. Investors should conduct a detailed analysis of submarkets within Costa Mesa to identify areas where the gap between FMR and market rents is narrower. 3. **Seek Out Mixed-Income Developments**: Investors might consider developing or investing in mixed-income housing projects that cater to both Section 8 voucher holders and market-rate tenants. This approach can help balance the lower rental income from Section 8 units with higher market rents from other units. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 92626 is to **Skip**. The high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow while adhering to FMR guidelines. The significant gap between FMR and market rates suggests that landlords may be disinclined to accept Section 8 vouchers, and the overall market conditions do not favor investments that rely heavily on government subsidies. Instead, investors should look for areas with more favorable price-to-FMR ratios or consider alternative investment strategies that can better leverage the local market dynamics.

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.