Location: Santa Ana-Anaheim-Irvine, CA | Metro: Santa Ana-Anaheim-Irvine, CA HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,730 |
| 1 Bedroom | $2,770 |
| 2 Bedrooms | $3,240 |
| 3 Bedrooms | $4,400 |
| 4 Bedrooms | $5,260 |
| 5 Bedrooms | $6,102 |
| 6 Bedrooms | $6,834 |
| 7 Bedrooms | $7,381 |
| 8 Bedrooms | $7,750 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,770 | $395,163 | 0.7% | D |
| 2BR | $3,240 | $693,478 | 0.47% | F |
| 3BR | $4,400 | $949,857 | 0.46% | F |
| 4BR | $5,260 | $1,065,458 | 0.49% | F |
| 5BR | $6,102 | $1,198,550 | 0.51% | F |
U.S. Census Bureau data (2024)
The ZIP code 92868, located in Orange, California, presents a unique rental market scenario for both renters and landlords. The median household income in this area stands at $97,500, which is a solid financial foundation for most families. However, the market rate for rent, known as the Zillow Observed Rent Index (ZORI), is set at $3,014 per month. This figure represents the average cost for renting a home in the area without any assistance.
When comparing this market rate to the Federal Market Rent (FMR) for the fiscal year 2024, which is $2,810 for the ZIP, it becomes evident that there is a significant gap. The FMR is the amount that Section 8 vouchers will cover for a standard unit in the area. This means that a household receiving a Section 8 voucher would have their rent capped at $2,810, leaving a difference of $204 between the market rate and the voucher payment.
In ZIP 92868, 69.1% of the population are renters, indicating a high demand for rental properties. With a total population of 26,380, this translates to approximately 18,223 renters. Given the high percentage of renters, the affordability gap has a direct impact on competition among landlords. Properties priced at or below the FMR are more likely to attract tenants who rely on government assistance, while those above may cater to the remaining portion of the market that can afford higher rents.
For landlords considering whether to accept Section 8 vouchers or focus on cash-paying tenants, the decision should be based on an understanding of the local rental dynamics. Accepting vouchers ensures a steady stream of income, albeit slightly below the market rate, and reduces the risk of vacancies. On the other hand, targeting cash-paying tenants might offer a higher monthly rent but could also increase competition and vacancy risks, especially if the number of households able to pay the full ZORI is limited.
A key takeaway for landlords is to balance their portfolio by offering a mix of units that cater to both voucher recipients and cash-paying tenants. This strategy helps mitigate financial risks and ensures a diverse tenant base. Additionally, understanding the local economic conditions and the availability of Section 8 vouchers can inform pricing decisions and rental policies, ultimately leading to a more stable and profitable investment.
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.