Section 8 Fair Market Rent (FMR) for ZIP 94086 - 2027

Investment Score for ZIP 94086

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	$2,710
1 Bedroom	$3,070
2 Bedrooms	$3,610
3 Bedrooms	$4,850
4 Bedrooms	$5,170
5 Bedrooms	$5,997
6 Bedrooms	$6,717
7 Bedrooms	$7,254
8 Bedrooms	$7,617

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	$3,070	$627,452	0.49%	F
2BR	$3,610	$1,074,523	0.34%	F
3BR	$4,850	$1,919,251	0.25%	F
4BR	$5,170	$2,466,427	0.21%	F
5BR	$5,997	$2,835,166	0.21%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94086 (Sunnyvale, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 94086, as set by HUD for 2026, is $3870 for a two-bedroom apartment. However, the Zillow median price for a two-bedroom home in this area is $1,117,504, which translates to a price-to-FMR ratio of 24.1x. This means that the actual market rent for a two-bedroom unit is likely much higher than the FMR. For example, if we assume a typical rental yield of 1%, the implied monthly rent would be approximately $9,312.50, which is significantly above the FMR of $3870. This stark difference between the FMR and the actual market rent poses significant constraints for Section 8 voucher holders. They can only afford units priced at or below the FMR, making it challenging to find suitable housing in this highly competitive market. The FMR represents just 26.2% of the median household income of $177,054, indicating that even without a voucher, renters would struggle to pay market rates. #### Affordability & Renter Profile ZIP code 94086 has a high renter population percentage of 69.5%, suggesting a strong demand for rental properties. The occupancy rate of 94.9% further supports this, showing that there is little vacancy and a tight rental market. Given the median household income of $177,054, most residents are likely employed in high-paying tech jobs, as Sunnyvale is part of Silicon Valley. However, the majority of these residents are renters, not homeowners, due to the extremely high cost of living and housing in the area. The median rent for a two-bedroom unit being so far below the median household income indicates that the market is very tight, with limited options for affordable housing. This situation is exacerbated by the high price-to-FMR ratio, which suggests that landlords who accept Section 8 vouchers are operating at a significant discount compared to market rates. #### Investor Angle From an investor perspective, the ZIP code 94086 is not cash-flow positive at the FMR levels. With an FMR of $3870 for a two-bedroom unit, and the implied market rent being around $9,312.50, accepting a Section 8 voucher would mean a substantial reduction in rental income. Additionally, the high price-to-FMR ratio of 24.1x implies that the purchase price of a property is far beyond what a Section 8 voucher holder could afford based on the FMR. Investment grade in this market is low for Section 8-focused investors. The high cost of acquiring properties combined with the low rental income allowed under the voucher program makes it difficult to achieve a positive cash flow. Moreover, the limited pool of potential tenants who can use Section 8 vouchers due to the high cost of living further reduces the attractiveness of this market for such investments. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider focusing on smaller units, such as one-bedroom apartments, where the FMR is $3310. While still below market rates, these units might be easier to rent out to voucher holders. 2. **Consider Subsidized Housing Programs**: Investors might want to explore other subsidized housing programs that offer higher payment standards than Section 8. For instance, Low-Income Housing Tax Credits (LIHTC) or state-specific subsidies could provide better financial returns while still serving the needs of low-income residents. 3. **Diversify Tenant Mix**: To mitigate the risk of relying solely on Section 8 vouchers, investors should diversify their tenant mix. This could include a combination of market-rate tenants and those using other forms of assistance, thereby balancing the overall rental income. #### Bottom Line Given the high cost of living and the tight rental market in ZIP code 94086, the recommendation for Section 8-focused investors is to **skip** this market. The FMR levels are too low relative to the actual market rents, making it unfeasible to achieve positive cash flows. Instead, investors should look for areas with lower price-to-FMR ratios or consider alternative subsidized housing programs that offer more favorable terms.

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.