Section 8 Fair Market Rent (FMR) for ZIP 93637 - 2027

Investment Score for ZIP 93637

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	$1,260
1 Bedroom	$1,260
2 Bedrooms	$1,450
3 Bedrooms	$2,010
4 Bedrooms	$2,420
5 Bedrooms	$2,807
6 Bedrooms	$3,144
7 Bedrooms	$3,396
8 Bedrooms	$3,566

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	$1,450	$319,528	0.45%	F
3BR	$2,010	$387,589	0.52%	F
4BR	$2,420	$436,502	0.55%	F
5BR	$2,807	$486,858	0.58%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 93637 (Madera, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 93637 is set by HUD for 2026. For a two-bedroom unit, the FMR is $1390 per month. This figure represents 23.3% of the median household income of $71,724 in Madera, CA. However, the actual rental market is significantly higher. The Zillow median price for a two-bedroom rental unit is $316,989, which translates to a monthly rent of approximately $19.0x the FMR. Therefore, the actual rental costs are about $19.0x $1390 = $26,410 per month. This stark difference between FMR and actual rents creates significant constraints for voucher holders, who can only afford units priced at or below the FMR. Consequently, voucher holders face severe limitations in finding suitable housing within their budget. #### Affordability & Renter Profile The population of Madera is 43,785, with 41.0% of residents being renters. Given that the occupancy rate is 93.6%, it suggests that the rental market is relatively tight, with most available units occupied. The median household income of $71,724 indicates that the majority of residents are middle-class individuals. However, the high price-to-FMR ratio of 19.0x implies that the rental market is not affordable for many low-income households. This tight market condition means that there is likely a significant demand for affordable housing, particularly among lower-income renters who rely on government assistance programs like Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 93637 presents a challenging environment due to the high price-to-FMR ratio. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical rental yields and expenses. Assuming a conservative rental yield of 5%, the annual rental income for a two-bedroom unit priced at $316,989 would be $316,989 * 0.05 = $15,849.45, or approximately $1320.79 per month. This is slightly above the FMR of $1390 but still far below the actual market rent of $26,410 per month. Given that the FMR is significantly lower than the market rent, investors relying solely on FMR will struggle to cover the mortgage payments, maintenance costs, and other expenses associated with property ownership. Additionally, the high price-to-FMR ratio suggests that the investment grade is low, as the returns are unlikely to justify the initial investment cost. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom or studio apartments. These units typically have lower FMRs and might be more affordable for voucher holders. For instance, the FMR for a one-bedroom unit is $1070, which is significantly lower than the FMR for a two-bedroom unit. This could provide a better chance of attracting tenants with Section 8 vouchers. 2. **Consider Renovation Projects**: Investors looking to capitalize on the rental market dynamics should consider purchasing older properties that require renovations. By investing in upgrades, they can potentially increase the rental value while keeping the initial purchase price within the FMR range. This strategy can help bridge the gap between the FMR and the actual market rent, making the investment more viable. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 93637 is to **skip** this market. The high price-to-FMR ratio indicates that the rental market is not aligned with the financial capabilities of voucher holders, making it difficult to find tenants willing to accept the FMR. Additionally, the tight occupancy rate and high median home values suggest that the market is not favorable for cash-flow positive investments at the FMR level. Investors should look for areas where the FMR is closer to the actual market rent, providing a better opportunity to attract Section 8 tenants and achieve positive cash flow.

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.