Section 8 Fair Market Rent (FMR) for ZIP 93638 - 2027

Investment Score for ZIP 93638

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	$1,250
1 Bedroom	$1,250
2 Bedrooms	$1,440
3 Bedrooms	$1,990
4 Bedrooms	$2,410
5 Bedrooms	$2,796
6 Bedrooms	$3,132
7 Bedrooms	$3,383
8 Bedrooms	$3,552

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	$1,440	$264,291	0.54%	F
3BR	$1,990	$362,205	0.55%	F
4BR	$2,410	$405,074	0.59%	F
5BR	$2,796	$444,919	0.63%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 93638 (Madera, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 93638, as per the 2026 data, is set at $1350 for a two-bedroom unit. This amount represents 26.0% of the median household income of $62,374. However, the actual rental market in Madera is significantly higher. The Zillow median price for a two-bedroom unit is $258,277, which translates to a price-to-FMR ratio of 15.9x. This means that landlords would need to charge approximately $15.9 times the FMR to cover their mortgage payments if they were to purchase a property at the median price. For voucher holders, this presents a significant constraint, as the FMR is often below the market rent, making it challenging to find suitable housing. #### Affordability & Renter Profile Given that 44.0% of the population in Madera are renters, the rental market is quite substantial. With a median household income of $62,374, affordability is a key issue for many residents. The FMR for a two-bedroom unit is only $1350, which is far below the median rental price. This suggests that the market is relatively tight, with a high occupancy rate of 94.5%, indicating that there is little excess capacity in the rental market. Many renters are likely to be facing financial stress due to the high cost of living relative to their income levels. #### Investor Angle From an investor perspective, the ZIP code 93638 offers a mixed outlook. While the occupancy rate is high at 94.5%, suggesting strong demand, the price-to-FMR ratio of 15.9x indicates that the rental market is much higher than what the FMR can support. To determine whether this ZIP code is cash-flow positive at FMR, we must consider the typical rental rates versus the FMR. Given that the Zillow median price for a two-bedroom unit is $258,277, and assuming a conservative mortgage interest rate of 5%, the monthly mortgage payment would be around $1323. This is very close to the FMR of $1350, leaving little room for profit after accounting for other expenses such as maintenance, utilities, and property taxes. Therefore, the investment grade for properties in this ZIP code is low, as the FMR does not provide sufficient cash flow to cover the costs of ownership. #### 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, where the FMR is lower ($1040). These units are more likely to generate positive cash flow when rented out under Section 8 vouchers. 2. **Consider Off-Market Properties**: Investors looking to capitalize on the rental market dynamics should consider purchasing off-market properties, such as foreclosures or distressed assets, which may be available at a discount to the median price. This could help reduce the overall cost of acquisition and improve the cash flow potential. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 93638 is to **Skip**. The high price-to-FMR ratio and limited cash flow potential make it difficult to achieve profitability through Section 8 rentals. Investors should look for areas with lower median prices or higher FMRs to ensure better returns on their investments.

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.