Section 8 Fair Market Rent (FMR) for ZIP 94087 - 2027

Investment Score for ZIP 94087

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	$2,900
1 Bedroom	$3,280
2 Bedrooms	$3,860
3 Bedrooms	$5,190
4 Bedrooms	$5,530
5 Bedrooms	$6,415
6 Bedrooms	$7,185
7 Bedrooms	$7,760
8 Bedrooms	$8,148

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	$3,280	$586,927	0.56%	F
2BR	$3,860	$1,058,524	0.36%	F
3BR	$5,190	$2,538,820	0.2%	F
4BR	$5,530	$3,017,107	0.18%	F
5BR	$6,415	$3,333,009	0.19%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94087 (Sunnyvale, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 94087, as per HUD’s 2026 guidelines, is set at $4,110 for a two-bedroom unit. This amount represents 23.7% of the median household income in Sunnyvale, which stands at $207,742. However, the actual rental market in Sunnyvale is significantly higher. The Zillow median price for a two-bedroom unit is $1,121,460, which translates to a monthly rent of approximately $9,345 based on typical mortgage payments. Given that the price-to-FMR ratio is 22.7x, it is clear that actual rents far exceed the FMR. For voucher holders, this means that finding affordable housing within their budget constraints is extremely challenging. #### Affordability & Renter Profile ZIP code 94087 has a population of 57,767, with 44.2% of residents being renters. The occupancy rate is 95.4%, indicating a tight market where demand consistently outstrips supply. Given the high median household income, the typical renter profile likely includes individuals working in tech-related fields, who can afford higher rents but still face significant challenges due to the high cost of living. The disparity between FMR and actual rents suggests that the market is highly competitive and not particularly affordable for low-income families, especially those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 94087 presents a mixed picture. While the actual rents are much higher than the FMR, operating a property strictly at the FMR level would be financially unviable. At $4,110 per month, an investor would struggle to cover operational costs, maintenance, and achieve a reasonable return on investment. The price-to-FMR ratio of 22.7x indicates that the market is overpriced relative to the FMR, making it difficult for investors to find properties that offer cash flow positive returns when only renting to Section 8 voucher holders. Given the high median household income and the strong demand for rentals, the investment grade for this ZIP code would be considered low for Section 8-focused investors. The primary challenge is the mismatch between the actual rental market and the FMR, leading to limited opportunities for profitable investments. #### Specific Actionable Insights 1. **Focus on Larger Units**: Given the high FMR for larger units, investors might consider focusing on three or four-bedroom units. The FMR for a three-bedroom unit is $5,430, and for a four-bedroom unit, it is $5,910. These higher FMRs provide a better opportunity to cover operational costs and generate positive cash flow compared to smaller units. 2. **Consider Mixed-Income Developments**: Investors could explore developing mixed-income housing projects where some units are rented at market rates while others are rented to Section 8 voucher holders. This approach allows for leveraging the high market rents to subsidize the lower FMR rents, creating a more balanced financial model. 3. **Utilize State and Local Subsidies**: In addition to federal Section 8 vouchers, investors should look into state and local subsidies that may be available. These additional subsidies can help bridge the gap between the FMR and the actual rental market, making Section 8 properties more financially viable. #### Bottom Line For Section 8-focused investors, the ZIP code 94087 (Sunnyvale, CA) is not recommended for buying or investing due to the significant mismatch between the actual rental market and the FMR. The high cost of living and tight rental market make it challenging to operate properties profitably at the FMR levels. Therefore, the recommendation is to **skip** this ZIP code unless you can incorporate mixed-income developments or secure additional subsidies. --- This analysis provides a comprehensive overview of the rental market dynamics in ZIP code 94087, highlighting the challenges faced by both tenants and investors in this area. The key takeaway is that Sunnyvale's high rents and limited affordability make it a less attractive option for Section 8-focused 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.