Section 8 Fair Market Rent (FMR) for ZIP 93635 - 2027

Investment Score for ZIP 93635

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	$1,390
1 Bedroom	$1,460
2 Bedrooms	$1,760
3 Bedrooms	$2,420
4 Bedrooms	$2,870
5 Bedrooms	$3,329
6 Bedrooms	$3,728
7 Bedrooms	$4,026
8 Bedrooms	$4,227

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	$1,760	$347,688	0.51%	F
3BR	$2,420	$428,063	0.57%	F
4BR	$2,870	$496,157	0.58%	F
5BR	$3,329	$567,134	0.59%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 93635 (Los Banos, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Los Banos, CA (ZIP 93635) in 2026 is set at $1760 for a two-bedroom unit, which represents 31.5% of the median household income of $55,842 ($67,129 * 0.83). However, the actual rent for a two-bedroom unit based on Zillow's median price is significantly higher at $344,912 annually, or approximately $28,742.67 monthly. This means that the price-to-FMR ratio for a two-bedroom unit is 16.3 times higher, indicating that the actual rental prices far exceed the FMR. For voucher holders, this presents significant constraints. The maximum allowable rent under the Section 8 program is $1760 for a two-bedroom unit, which is much lower than the market rate. Consequently, voucher holders may struggle to find suitable housing within their budget, particularly in a tight market where rents are already high. #### Affordability & Renter Profile Los Banos has a population of 50,149, with 41.3% of residents being renters. Given the occupancy rate of 95.1%, it suggests that the rental market is quite tight, with limited availability. The median household income of $67,129 indicates that the area is moderately priced, but the high price-to-FMR ratio for two-bedroom units implies that many renters, especially those relying on Section 8 vouchers, will find it challenging to afford housing. The high price-to-FMR ratio also suggests that there is a significant gap between what renters can afford and what landlords are charging. This could lead to a situation where many voucher holders are forced into substandard housing or face long waiting lists for affordable units. Additionally, the high rental prices relative to income indicate that Los Banos is likely experiencing a housing affordability crisis, particularly for low-income renters. #### Investor Angle From an investor perspective, the ZIP code 93635 offers mixed opportunities. While the actual rental prices are high, the FMR is significantly lower. To determine if this ZIP is cash-flow positive at FMR, we need to consider the typical expenses associated with owning and renting out a property. Assuming a conservative estimate of 10% of the purchase price for annual maintenance and other costs, a two-bedroom unit would cost around $34,491.20 annually in maintenance alone. This is already close to the FMR of $1760 per month, leaving little room for profit unless the property is purchased at a discount or has additional revenue streams. Given the high price-to-FMR ratio, properties in this ZIP are likely overpriced relative to what Section 8 voucher holders can pay. Therefore, the investment grade for this ZIP is relatively low for Section 8-focused investors. The high market prices make it difficult to acquire properties at a price point that allows for positive cash flow when rented at FMR levels. #### Specific Actionable Insights 1. **Focus on Lower-Rent Properties**: Investors should focus on acquiring properties that are priced closer to the FMR levels. For example, a one-bedroom unit with an FMR of $1420 might be more feasible for positive cash flow. This strategy would allow investors to cater to Section 8 voucher holders while still maintaining profitability. 2. **Consider Renovation Projects**: Given the tight rental market and high demand, investors might consider purchasing older, less expensive properties and renovating them to meet FMR standards. This approach can potentially yield higher returns by increasing the property’s value and appeal to renters. 3. **Explore Government Subsidies and Programs**: Investors should look into government subsidies and programs designed to support affordable housing. These programs can help offset the costs of maintaining properties at FMR levels, making the investment more viable. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 93635 is to **Skip** this market. The high price-to-FMR ratio and tight rental market make it challenging to achieve positive cash flow when renting at FMR levels. Additionally, the limited availability of affordable units and the high proportion of renters who may struggle to find suitable housing suggest that this market is not well-suited for Section 8 investments. However, investors interested in the broader rental market may find opportunities in Los Banos due to the high demand and occupancy rates. For those specifically targeting Section 8 vouchers, other ZIP codes with a more favorable price-to-FMR ratio and greater supply of affordable units would be more appropriate.

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.