Section 8 Fair Market Rent (FMR) for ZIP 93427 - 2027

FY 2027 Fair Market Rent Rates

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Housing Authorities Serving ZIP 93427

• Housing Authority of the County of Santa Barbara (Lompoc, CA) - 4,316 Section 8 vouchers
• Housing Authority of the City of Santa Barbara (Santa Barbara, CA) - 2,931 Section 8 vouchers

If a landlord is considering purchasing a property in ZIP code 93427 (Buellton, CA) for Section 8 purposes, they must evaluate several factors to make an informed decision.

1. Does the Fair Market Rent (FMR) of $3220 cover the debt service on a $920,146 property?

• Yes: If the landlord can secure a mortgage rate that allows the FMR to cover the monthly debt service, then the answer is yes. For instance, if the monthly debt service is $1,200 or less, the FMR comfortably exceeds this amount.
• No: If the monthly debt service exceeds $3220, then the FMR does not cover the cost, making it financially unviable without additional income sources or subsidies.
• It Depends: The viability hinges on the exact terms of the mortgage, including interest rates and loan duration. A detailed financial analysis is required to determine if the FMR of $3220 can sufficiently cover the monthly debt service.

2. Is the market rent of $2,122 above, at, or below the FMR?

• Above: If the market rent is higher than the FMR, the landlord might consider renting to non-Section 8 tenants to maximize income. However, they should also weigh the potential benefits of Section 8 tenancy, such as guaranteed payment and stable occupancy.
• At: If the market rent equals the FMR, the landlord faces a straightforward decision where the FMR matches the market rent. This scenario makes Section 8 tenancy a reasonable option, but the landlord must still assess other factors like demand and vacancy rates.
• Below: If the market rent is below the FMR, Section 8 tenancy becomes more attractive as it provides a higher rental income than what the market offers. However, the landlord should still evaluate the overall demand for rentals in the area.

3. Are 40.8% of residents renters, and is the Days on Market (DOM) sufficient to ensure demand?

• Yes: With 40.8% of residents being renters, there is a substantial base of potential tenants. Additionally, if the DOM is low, it indicates that properties are rented quickly, suggesting strong demand. In this case, a landlord can confidently pursue Section 8 tenancy knowing there is a ready market for their property.
• No: If the DOM is high, it suggests that properties take longer to rent, indicating weaker demand. Even with a significant portion of residents being renters, a high DOM could mean that finding tenants, especially those participating in the Section 8 program, may be challenging.
• It Depends: The percentage of renters alone does not guarantee demand; the DOM plays a critical role. If the DOM is moderate, the landlord may need to conduct further research into the local housing market, including vacancy rates and the number of Section 8 vouchers available, to determine if there is sufficient demand.

In summary, the decision to purchase a property in ZIP 93427 for Section 8 purposes requires careful consideration of the FMR's ability to cover debt service, the relationship between market rent and FMR, and the strength of rental demand as indicated by the percentage of renters and DOM. Each factor must align favorably for a positive outcome.

Data Sources: FMR data from HUD (2027). 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.