Section 8 Fair Market Rent (FMR) for ZIP 92840 - 2027

Investment Score for ZIP 92840

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	$2,420
1 Bedroom	$2,480
2 Bedrooms	$2,920
3 Bedrooms	$3,960
4 Bedrooms	$4,730
5 Bedrooms	$5,487
6 Bedrooms	$6,145
7 Bedrooms	$6,637
8 Bedrooms	$6,969

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	$2,480	$447,477	0.55%	F
2BR	$2,920	$636,726	0.46%	F
3BR	$3,960	$982,481	0.4%	F
4BR	$4,730	$1,057,141	0.45%	F
5BR	$5,487	$1,217,831	0.45%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 92840 (Garden Grove, CA) #### Section 8 Voucher Dynamics The Federal Market Rent (FMR) for ZIP code 92840 in Garden Grove, CA, is set at $2850 for a two-bedroom unit in 2026. This amount represents 34.6% of the median household income of $98,881. However, the actual rent prices in the area are significantly higher. According to Zillow, the median price for a two-bedroom rental property is $631,181, which is nearly 18.5 times the FMR. This indicates that the FMR is substantially lower than the market rent, creating significant constraints for voucher holders. They would likely struggle to find affordable housing options within their budget, especially since the occupancy rate is high at 94.2%, suggesting limited availability of units. #### Affordability & Renter Profile With a population of 54,534 and a 47.3% renter percentage, Garden Grove has a substantial number of renters. The median household income of $98,881 suggests that the majority of residents have middle-class incomes. Given the high occupancy rate and the disparity between FMR and actual rents, it is clear that the market is tight and oversupplied with demand relative to supply. This means that renters, particularly those relying on Section 8 vouchers, face a challenging environment where finding affordable housing is difficult. #### Investor Angle From an investor perspective, the ZIP code 92840 presents a mixed scenario. The FMR for a two-bedroom unit is $2850, but the actual market rent is much higher at $631,181. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the potential rental income versus the cost of acquisition and maintenance. Given the price-to-FMR ratio of 18.5x, it is evident that properties purchased at market rates would not generate sufficient rental income to cover the mortgage and other expenses when rented at FMR levels. For example, a two-bedroom unit priced at $631,181 would require a monthly mortgage payment well above $2850, even without considering property taxes, insurance, and maintenance costs. Therefore, investing in this ZIP code at market rates would likely result in negative cash flow for Section 8-focused investors. #### Specific Actionable Insights 1. **Focus on Below-Market Properties**: Investors should seek out properties that are priced below the median market rate of $631,181. For instance, a two-bedroom unit priced around $300,000 to $400,000 could potentially offer positive cash flow when rented at the FMR of $2850. This would allow investors to meet the needs of Section 8 voucher holders while still generating a profit. 2. **Consider Renovation Projects**: There may be opportunities to acquire older or less desirable properties at a lower price point and renovate them to increase their value. By doing so, investors can potentially achieve a balance between the cost of acquisition and the rental income generated by Section 8 tenants. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors is to **Skip** this ZIP code unless they can find properties significantly below the market rate. The high price-to-FMR ratio and tight market conditions make it challenging to achieve positive cash flow when renting at FMR levels. Investors should look elsewhere for better opportunities or focus on acquiring properties at a discount and improving them to meet the needs of Section 8 tenants.

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.