Section 8 Fair Market Rent (FMR) for ZIP 92688 - 2027

Investment Score for ZIP 92688

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	$2,820
1 Bedroom	$2,850
2 Bedrooms	$3,340
3 Bedrooms	$4,540
4 Bedrooms	$5,420
5 Bedrooms	$6,287
6 Bedrooms	$7,041
7 Bedrooms	$7,604
8 Bedrooms	$7,984

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	$2,850	$457,228	0.62%	D
2BR	$3,340	$664,143	0.5%	F
3BR	$4,540	$1,042,785	0.44%	F
4BR	$5,420	$1,349,846	0.4%	F
5BR	$6,287	$1,638,763	0.38%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 92688 (Rancho Santa Margarita, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 92688 in 2026 are as follows: - 0BR: $2930 - 1BR: $3000 - 2BR: $3540 (which is 27.9% of the median household income) - 3BR: $4810 - 4BR: $5740 These FMRs represent the maximum rent that a Section 8 voucher holder can pay. However, it's important to note that these figures are significantly lower than the actual market rents. For instance, the Zillow median price for a 2BR unit is $667,887, which translates to a price-to-FMR ratio of 15.7x. This indicates that the actual market rents are much higher than what the FMR allows, creating a significant constraint for voucher holders. They will likely struggle to find units within their budget, particularly for larger units like 3BR and 4BR apartments. #### Affordability & Renter Profile Given the high median household income of $152,528, the population of Rancho Santa Margarita has a strong financial standing. The 31.1% renter percentage suggests that while a substantial portion of the population is renting, they are likely able to afford higher rents due to their income levels. The occupancy rate of 97.4% further underscores that this is a tight market, with very little vacancy available. The affordability of housing is a critical issue for renters, especially those relying on Section 8 vouchers. The FMR for a 2BR unit is only $3540, which is just 27.9% of the median household income. This means that even without a voucher, a 2BR unit would be affordable for most residents. However, the reality is that the actual market rents are far beyond the FMR, making it difficult for voucher holders to secure housing. #### Investor Angle From an investor perspective, the FMRs do not align well with the actual market rents. To determine if the ZIP code is cash-flow positive at FMR, we need to consider the typical rental prices. Given that the Zillow median price for a 2BR unit is $667,887, the monthly rent would likely be around $5,566 (assuming a 1% monthly rent-to-price ratio). This is significantly higher than the FMR of $3540, indicating that properties rented at FMR would not generate sufficient cash flow to cover mortgage payments, maintenance, and other operational costs. The investment grade for this ZIP code is low for Section 8-focused investors. The high price-to-FMR ratio suggests that there is limited availability of units that can be rented at or below the FMR, making it challenging to attract and retain voucher tenants. Additionally, the tight market conditions mean that landlords have the leverage to charge higher rents, reducing the attractiveness of this area for investors seeking to rely solely on Section 8 vouchers. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should focus on smaller units such as 0BR and 1BR apartments, where the FMR is closer to the actual market rents. For example, the FMR for a 1BR unit is $3000, which is more feasible compared to the $5,566 estimated rent for a 2BR unit. This strategy can help ensure better cash flow and a higher likelihood of finding tenants who qualify for Section 8 vouchers. 2. **Consider Dual Strategies**: Given the high price-to-FMR ratio, investors might want to consider a dual strategy where they cater to both Section 8 voucher holders and market-rate renters. By offering a mix of units, some at FMR and others at market rates, investors can balance their portfolio and mitigate risks associated with the limited availability of units that can be rented at FMR. 3. **Look for Subsidized Housing Opportunities**: Investors should explore opportunities for subsidized housing projects, which can provide additional support and make the units more affordable for voucher holders. This could include government programs or partnerships with local non-profits that offer additional funding or incentives for affordable housing. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 92688 is to **Skip**. The high price-to-FMR ratio and tight market conditions make it challenging to find units that can be rented at or below the FMR, leading to potential cash flow issues and difficulty in attracting and retaining voucher tenants. Investors looking to enter this market should consider alternative strategies or look into areas with a more favorable price-to-FMR ratio.

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.