Section 8 Fair Market Rent (FMR) for ZIP 93436 - 2027

Investment Score for ZIP 93436

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	$2,220
1 Bedroom	$2,480
2 Bedrooms	$2,820
3 Bedrooms	$3,670
4 Bedrooms	$4,190
5 Bedrooms	$4,860
6 Bedrooms	$5,443
7 Bedrooms	$5,878
8 Bedrooms	$6,172

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
2BR	$2,820	$428,488	0.66%	D
3BR	$3,670	$584,825	0.63%	D
4BR	$4,190	$653,430	0.64%	D
5BR	$4,860	$802,810	0.61%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 93436 (Lompoc, CA) #### Introduction ZIP code 93436, located in Lompoc, California, is part of Santa Barbara County. With a population of 55,820, it has a significant rental market, with 45.3% of residents being renters. The occupancy rate stands at 95.9%, indicating a robust demand for housing. This analysis will focus on the dynamics of the Section 8 voucher program, affordability, renter profile, investor opportunities, and actionable insights for landlords and investors. #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for 2026 in ZIP 93436 is set at $2730 for a two-bedroom unit, which represents 40.9% of the median household income of $80,097. However, the Zillow median price for a two-bedroom home in this area is $421,202, resulting in a price-to-FMR ratio of 12.9x. This means that the actual market rent for a two-bedroom unit is likely much higher than the FMR, creating a significant constraint for voucher holders. For example, a voucher holder with a two-bedroom unit would be limited to paying up to $2730 per month, while the average market rent could be significantly higher. This disparity can lead to difficulties in finding suitable housing within the voucher limits, especially since the FMR is only a fraction of the actual market rent. #### Affordability & Renter Profile Given that 45.3% of the population are renters, there is a substantial demand for affordable housing. The median household income of $80,097 suggests that the majority of residents have moderate to upper-middle-class incomes. However, the high price-to-FMR ratio indicates that the rental market is relatively expensive compared to the FMR, making it challenging for lower-income residents to find affordable housing. The tight market conditions, with an occupancy rate of 95.9%, suggest that there is little excess supply of rental units. This high occupancy rate can drive up rents, further exacerbating the affordability issue for low-income households. As a result, many renters, particularly those relying on Section 8 vouchers, may struggle to find units that fit their budget. #### Investor Angle From an investor perspective, the FMR for a two-bedroom unit is $2730, but the actual market rent is likely much higher given the price-to-FMR ratio of 12.9x. If we assume that the actual market rent for a two-bedroom unit is around $35,000 annually (based on the Zillow median price), then the FMR represents only about 8.4% of the total annual rent. This implies that investors who rely solely on FMRs to cover their costs may face significant financial challenges. For instance, if an investor purchases a two-bedroom property for $421,202 and aims to achieve a 5% cash-on-cash return, they would need to generate approximately $21,060 in annual rental income. At the FMR of $2730 per month, this equates to $32,760 annually, which is still below the required return. Moreover, the investment grade for properties in this ZIP code would likely be considered low due to the significant gap between FMR and actual market rents. Investors should carefully consider the potential for vacancy and the difficulty in attracting tenants willing to pay only the FMR. #### Specific Actionable Insights 1. **Rent Pricing Strategy**: Landlords should consider setting rents slightly above the FMR but below the actual market rates to attract both voucher holders and other renters. For example, a two-bedroom unit priced at $3000 per month might still be attractive to voucher holders who can negotiate with the local housing authority for a higher payment standard. 2. **Property Upgrades**: Given the high occupancy rate, investing in property upgrades can help landlords stand out in the competitive rental market. Improvements such as modern kitchens, energy-efficient appliances, and updated bathrooms can justify higher rents and make the property more appealing to a broader range of tenants. 3. **Diversify Tenant Base**: To mitigate the risk associated with relying solely on Section 8 voucher holders, landlords should diversify their tenant base. This includes targeting other moderate-income renters who may be willing to pay closer to the actual market rates. Diversification can also help stabilize cash flow and reduce the impact of any changes in voucher policies. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP 93436 is to **skip** purchasing properties based solely on FMR expectations. The high price-to-FMR ratio and tight market conditions indicate that achieving a positive cash flow purely through FMR rents is unlikely. Instead, investors should consider other ZIP codes with a more favorable balance between FMR and actual market rents, or explore strategies to attract a broader range of tenants beyond just voucher holders. ### Conclusion ZIP 93436 presents a challenging environment for Section 8 voucher holders and investors alike. The significant gap between FMR and actual market rents makes it difficult for voucher holders to find suitable housing, while investors face the risk of not achieving desired returns. Careful consideration of alternative strategies and diversification of the tenant base is essential for success in this market.

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.