Section 8 Fair Market Rent (FMR) for ZIP 94025 - 2027

Investment Score for ZIP 94025

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	$2,990
1 Bedroom	$3,490
2 Bedrooms	$4,290
3 Bedrooms	$5,610
4 Bedrooms	$6,310
5 Bedrooms	$7,320
6 Bedrooms	$8,198
7 Bedrooms	$8,854
8 Bedrooms	$9,297

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$3,490	$900,829	0.39%	F
2BR	$4,290	$1,673,714	0.26%	F
3BR	$5,610	$2,624,700	0.21%	F
4BR	$6,310	$4,175,755	0.15%	F
5BR	$7,320	$5,816,249	0.13%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94025 (Menlo Park, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Menlo Park, CA (ZIP 94025), as of 2026, is set at $4210 for a two-bedroom unit. This amount represents 23.3% of the median household income in the area, which is $216,601. However, the actual rental market is significantly higher, with the Zillow median price for a two-bedroom unit being $1,673,157. The price-to-FMR ratio is 33.1x, indicating that the actual rent far exceeds the FMR. For Section 8 voucher holders, this means they face significant constraints in finding affordable housing. The voucher amount of $4210 would only cover a small fraction of the actual rent, making it challenging for them to secure housing in this ZIP code without substantial out-of-pocket expenses. #### Affordability & Renter Profile Menlo Park has a population of 40,721, with 41.5% of residents being renters. Given the high median household income, many of these renters likely have stable employment and can afford the high rents. However, the occupancy rate of 88.0% suggests that there is a strong demand for rental properties, leading to a tight market. The high price-to-FMR ratio indicates that the market is not affordable for low-income families relying on Section 8 vouchers. This tight market condition makes it difficult for voucher holders to find suitable housing, as landlords may prefer tenants who can pay the full market rent. #### Investor Angle From an investor perspective, the FMR for Menlo Park is set at levels that are well below the actual market rents. A two-bedroom unit at $4210 per month would be unlikely to generate positive cash flow given the median market rent of $1,673,157. This implies that properties rented at FMR would struggle to cover operating costs, let alone provide a profit. Consequently, the investment grade for properties in this ZIP code, when considering Section 8 vouchers, would be low due to the limited ability to attract and retain tenants who can only pay the FMR. #### Specific Actionable Insights 1. **Focus on Higher-Income Tenants**: Given the high median household income and the tight rental market, investors should consider targeting higher-income tenants who can afford market rates. This strategy would likely yield better financial returns and ensure a steady stream of rental income. 2. **Consider Mixed-Income Developments**: Investors might explore mixed-income developments where a portion of units are designated for low-income families using Section 8 vouchers, while the majority are rented at market rates. This approach can help balance the financial impact of renting at FMR with the potential for higher revenue from market-rate units. 3. **Evaluate Alternative Rental Assistance Programs**: Since the FMR is significantly lower than market rents, investors could look into alternative rental assistance programs that offer higher subsidies. These programs might provide more realistic support for low-income families in this expensive market. #### Bottom Line For investors focusing on Section 8 vouchers, the recommendation for ZIP 94025 (Menlo Park, CA) is to **Skip** this market. The extremely high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow or even break even when renting at FMR levels. Instead, investors should consider areas with more affordable markets or explore mixed-income development strategies to mitigate financial risks.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.