Section 8 Fair Market Rent (FMR) for ZIP 92656 - 2027

Investment Score for ZIP 92656

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	$3,160
1 Bedroom	$3,200
2 Bedrooms	$3,750
3 Bedrooms	$5,090
4 Bedrooms	$6,090
5 Bedrooms	$7,064
6 Bedrooms	$7,912
7 Bedrooms	$8,545
8 Bedrooms	$8,972

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	$3,200	$502,853	0.64%	D
2BR	$3,750	$748,701	0.5%	F
3BR	$5,090	$1,035,901	0.49%	F
4BR	$6,090	$1,501,915	0.41%	F
5BR	$7,064	$2,094,923	0.34%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 92656 (Aliso Viejo, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 92656, as set by HUD for 2026, is $3920 for a two-bedroom unit. This amount represents 34.2% of the median household income of $137,639 in Aliso Viejo. However, the Zillow median price for a two-bedroom home in this area is significantly higher at $753,784, resulting in a price-to-FMR ratio of approximately 16.0x. This means that the actual rent for a two-bedroom unit is likely much higher than the FMR, creating a significant gap between what voucher holders can afford and the market rates. For instance, if a landlord charges the Zillow median rent of $3125 per month (based on a 4.16% cap rate), which is still below the Zillow median price but above the FMR, a voucher holder would struggle to cover the difference. The constraints for voucher holders are thus quite severe, as they would need to find units renting at or below $3920, which is far below the market average. #### Affordability & Renter Profile Given the high median household income of $137,639, it is clear that Aliso Viejo is a relatively affluent area. Despite this, 42.5% of residents are renters, indicating a significant demand for rental properties. With an occupancy rate of 95.7%, the rental market is very tight, suggesting that there is little room for new supply without driving down rents. The high price-to-FMR ratio also implies that the rental market is highly competitive, with many renters potentially facing affordability challenges. The median rent for a two-bedroom unit being so much higher than the FMR indicates that only a small segment of the population, likely those with higher incomes or substantial savings, can afford to live here without financial assistance. For Section 8 voucher holders, the situation is even more challenging, as the FMR is well below the market rent, making it difficult to find suitable housing. #### Investor Angle From an investor perspective, the ZIP code 92656 presents a mixed picture. The high median home value of $753,784 suggests a robust real estate market, but the price-to-FMR ratio of 16.0x indicates that the rental market is not aligned with the FMR. If an investor were to purchase a property at the Zillow median price and aim to rent it out at the Zillow median rent of $3125 per month, the cash flow would be negative when considering the FMR. Specifically, if a landlord relies solely on Section 8 vouchers, they would receive only $3920 per month for a two-bedroom unit, which is insufficient to cover the mortgage payments and other expenses associated with a property valued at $753,784. However, there is potential for positive cash flow if the investor can charge a rent that is slightly above the FMR but still below the market rate. For example, charging $4500 per month for a two-bedroom unit would provide a modest positive cash flow while remaining somewhat affordable for higher-income renters. The investment grade for this ZIP code would be considered low due to the significant discrepancy between the FMR and the market rent, making it less attractive for Section 8-focused investors who rely heavily on government subsidies. #### Specific Actionable Insights 1. **Target Properties Below Market Value**: Investors should focus on acquiring properties that are priced below the Zillow median value of $753,784. This will help ensure that the rent charged can be closer to the FMR without sacrificing profitability. For instance, a property purchased at $600,000 could be rented out at $4500 per month, providing a better balance between affordability and cash flow. 2. **Consider Mixed-Income Developments**: Given the high median income and the significant number of renters, developing properties that cater to both Section 8 voucher holders and higher-income renters might be a viable strategy. This could involve offering a mix of subsidized and market-rate units, allowing landlords to leverage the higher rents from non-voucher tenants to offset the lower rents from voucher holders. #### Bottom Line For investors focused specifically on Section 8 vouchers, the ZIP code 92656 (Aliso Viejo, CA) is not recommended. The high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow while adhering to FMR guidelines. Therefore, the recommendation is to **skip** this ZIP code for Section 8-focused investments. Instead, investors might want to explore areas with a more favorable price-to-FMR ratio and a larger pool of potential voucher holders.

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.