Section 8 Fair Market Rent (FMR) for ZIP 94010 - 2027

Investment Score for ZIP 94010

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	$2,700
1 Bedroom	$3,150
2 Bedrooms	$3,880
3 Bedrooms	$5,070
4 Bedrooms	$5,710
5 Bedrooms	$6,624
6 Bedrooms	$7,419
7 Bedrooms	$8,013
8 Bedrooms	$8,414

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
1BR	$3,150	$781,338	0.4%	F
2BR	$3,880	$1,680,660	0.23%	F
3BR	$5,070	$2,924,307	0.17%	F
4BR	$5,710	$4,120,894	0.14%	F
5BR	$6,624	$5,813,831	0.11%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94010 (Hillsborough, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Hillsborough, CA, as of 2026, is set at $3660 for a two-bedroom unit. This amount represents 22.3% of the median household income in the area, which stands at $196,882. However, the actual rental prices in the market are significantly higher. The Zillow median price for a two-bedroom unit is $1,660,475, which translates to a monthly rent of approximately $13,837 based on typical mortgage calculations. This means that the actual rent is about 37.8 times the FMR, indicating a substantial gap between what is considered fair market rent and the actual rental prices in the area. Given this significant disparity, Section 8 voucher holders face considerable constraints in finding affordable housing. The maximum allowable rent under the voucher program would be $3660 per month for a two-bedroom unit, which is far below the average market rent. As a result, voucher holders may struggle to find suitable housing options within their budget, leading to potential overcrowding or displacement into less desirable areas. #### Affordability & Renter Profile With a population of 43,025, Hillsborough has a relatively high occupancy rate of 90.3%, suggesting that the housing market is quite tight. Approximately 40.4% of the residents are renters, indicating a significant demand for rental properties. Given the median household income of $196,882, the majority of residents can afford the high rental prices, but this also implies that the market is primarily catering to affluent individuals who can pay premium rents. The high price-to-FMR ratio of 37.8x underscores the unaffordable nature of the rental market for low-income families. This tight market condition means that there is little room for lower-priced rentals, making it challenging for those relying on Section 8 vouchers to secure housing. The high income levels suggest that the typical renter profile is likely to include professionals, executives, and other high earners who can afford the exorbitant rental costs. #### Investor Angle From an investor perspective, the ZIP code 94010 presents a unique challenge when considering cash flow and investment grade. At the FMR level, the rents are significantly lower than the market rates. For instance, a two-bedroom unit rented at $3660 per month would generate much less revenue compared to the market rate of around $13,837 per month. However, the high market rents indicate strong demand and potentially robust returns if investors can secure tenants willing to pay market rates. Given the tight market and high occupancy rate, there is a good chance that investors could achieve full occupancy without relying solely on Section 8 vouchers. The investment grade would be high due to the strong economic fundamentals and the ability to command premium rents. #### Specific Actionable Insights 1. **Focus on Higher-Rent Units**: Given the high price-to-FMR ratio, investors should focus on units that can command market rents rather than relying on FMR levels. A two-bedroom unit rented at $13,837 per month would provide a much better cash flow compared to renting it at $3660 per month. 2. **Consider Mixed-Income Developments**: To cater to both high-income and low-income renters, developers might consider mixed-income developments where a portion of units are reserved for Section 8 voucher holders while others are priced at market rates. This approach can help balance the financial viability of the project while still providing some affordable housing options. 3. **Explore Subsidies and Incentives**: Investors should explore government subsidies and incentives designed to encourage the development of affordable housing. These programs can help offset the financial burden of renting units at FMR levels and make such investments more attractive. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 94010 is to **Skip**. The high price-to-FMR ratio indicates that the market is extremely tight and unaffordable for low-income families. While there is strong demand for rental properties, the reliance on market rents rather than FMRs makes it difficult to attract Section 8 voucher holders. Therefore, investors looking to exclusively target Section 8 vouchers should look elsewhere for opportunities that align better with the financial constraints of the program.

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.