Location: Merced, CA | Metro: Fresno, 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 | $1,220 |
| 1 Bedroom | $1,220 |
| 2 Bedrooms | $1,500 |
| 3 Bedrooms | $2,090 |
| 4 Bedrooms | $2,400 |
| 5 Bedrooms | $2,784 |
| 6 Bedrooms | $3,118 |
| 7 Bedrooms | $3,367 |
| 8 Bedrooms | $3,535 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,090 | $319,945 | 0.65% | D |
| 4BR | $2,400 | $383,802 | 0.63% | D |
U.S. Census Bureau data (2024)
A decision tree for evaluating whether to purchase properties in ZIP code 93622 for Section 8 investment hinges on several key factors. Begin with the first question:
1) Does the Fair Market Rent (FMR) of $1,140 cover the debt service on a property valued at $335,926?
To determine this, you need to calculate the debt service coverage ratio (DSCR). Assume a typical mortgage rate of 4.5% and a loan-to-value ratio of 80%. The annual debt service would be approximately $13,700. With an FMR of $1,140 per month, the annual income from a Section 8 tenant would be $13,680. This means the FMR barely covers the debt service. If your debt service is higher due to a higher interest rate or down payment, then the answer is no. Otherwise, it's a yes.
2) Is the market rent of $968 (Census ACS) above, at, or below the FMR?
The market rent of $968 is below the FMR of $1,140. This suggests that landlords can potentially charge more than what the market currently bears, but they must ensure the property qualifies for Section 8 based on the FMR.
3) Are 53.6% renters combined with the unknown days on market (DOM) sufficient demand for Section 8?
The high percentage of renters at 53.6% indicates strong rental demand. However, the unknown DOM makes it difficult to assess how quickly properties are rented out. If the DOM is low, indicating quick turnover, then the demand is likely robust enough to support Section 8 investments. If DOM is high, it might suggest challenges in finding tenants, even though the rental rate is favorable.
Decision branches:
In conclusion, investing in ZIP code 93622 for Section 8 is feasible if your financials align closely with the FMR and you can leverage the high rental demand. However, the unknown DOM introduces uncertainty that must be considered.
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.