Section 8 Fair Market Rent (FMR) for ZIP 92870 - 2027

Investment Score for ZIP 92870

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	$2,450
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	$570,175	0.43%	F
2BR	$2,920	$632,573	0.46%	F
3BR	$3,960	$1,009,867	0.39%	F
4BR	$4,730	$1,213,074	0.39%	F
5BR	$5,487	$1,405,278	0.39%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 92870 (Placentia, CA) #### Section 8 Voucher Dynamics In ZIP code 92870, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $3010 per month. This figure represents 31.2% of the median household income of $115,929. However, the actual rent for a two-bedroom unit in Placentia is significantly higher, with the Zillow median price standing at $635,560. This translates into a price-to-FMR ratio of 17.6x, indicating that the actual rent is far above the FMR. For voucher holders, this means that finding affordable housing within the parameters of their vouchers is challenging. The FMR for a three-bedroom unit is $4090, which is still below the typical market rent, making it difficult for families to find suitable accommodation without exceeding their budget. #### Affordability & Renter Profile The population of Placentia is 52,826, with 36.4% being renters. Given the high median household income of $115,929, the majority of residents who rent are likely to be middle-class individuals or families. The occupancy rate of 96.0% suggests that the rental market is quite tight, with limited availability. This tightness is further exacerbated by the high price-to-FMR ratio, indicating that the market is oversupplied with units that are unaffordable for many low-income renters. The median rent for a two-bedroom unit being $3010 while the Zillow median price is $635,560 highlights the significant gap between what is considered fair market rent and the actual rental prices in the area. #### Investor Angle From an investor perspective, the ZIP code 92870 presents a mixed scenario. While the FMRs provide a guideline for rental pricing, the actual market rents are much higher. A two-bedroom apartment priced at $3010 would generate a monthly cash flow of approximately $2,408 after accounting for the typical 20% vacancy rate and other expenses. However, the high purchase price of $635,560 means that the initial investment required is substantial. The investment grade for this ZIP code would be moderate to high risk due to the potential difficulty in finding tenants willing to pay the FMR, especially if they rely on Section 8 vouchers. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider focusing on smaller units such as one-bedroom apartments. The FMR for a one-bedroom unit is $2550, which is lower than the median rent for a two-bedroom unit. This could help in attracting more Section 8 voucher holders who might struggle to afford larger units. 2. **Consider Outlying Areas**: Investors might want to look at outlying areas within Placentia where the rental prices are closer to the FMR. These areas could offer better opportunities for cash flow and a higher likelihood of finding tenants who can utilize Section 8 vouchers effectively. 3. **Develop Long-Term Strategy**: Due to the high cost of entry, investors should develop a long-term strategy that includes plans for property appreciation and potential increases in rental income over time. This could mitigate the risks associated with the current high price-to-FMR ratio. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 92870 is to **skip** this market. The high purchase prices and the significant gap between FMR and actual market rents make it challenging to achieve positive cash flow. Additionally, the tight occupancy rate indicates a competitive market, which could lead to difficulties in finding tenants who qualify for Section 8 vouchers. Investors looking to enter this market should carefully evaluate the financial feasibility and consider alternative strategies or locations that align better with the goals of Section 8 investments.

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.