Section 8 Fair Market Rent (FMR) for ZIP 94116 - 2027

Investment Score for ZIP 94116

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	$2,840
1 Bedroom	$3,310
2 Bedrooms	$4,080
3 Bedrooms	$5,330
4 Bedrooms	$6,000
5 Bedrooms	$6,960
6 Bedrooms	$7,795
7 Bedrooms	$8,419
8 Bedrooms	$8,840

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	$4,080	$1,451,402	0.28%	F
3BR	$5,330	$1,716,716	0.31%	F
4BR	$6,000	$2,030,993	0.3%	F
5BR	$6,960	$2,153,194	0.32%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94116, San Francisco, CA #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 94116 is set by HUD for 2026, with the following rates: - 0BR: $2730 - 1BR: $3270 - 2BR: $3960 (which represents 29.9% of the median household income) - 3BR: $5060 - 4BR: $5240 These figures represent the maximum amount that a Section 8 voucher holder can pay for rent. However, comparing these rates to actual market rents reveals significant disparities. For instance, the Zillow median price for a 2BR unit in 94116 is $1,404,744. This translates to a monthly mortgage payment of approximately $6,686 based on a 4.5% interest rate and a 30-year fixed mortgage. The price-to-FMR ratio for a 2BR unit is 29.6x, indicating that the actual rental costs far exceed the FMR. This makes it extremely challenging for voucher holders to find suitable housing within their budget. #### Affordability & Renter Profile ZIP code 94116 has a population of 43,791, with 26.9% of residents being renters. The occupancy rate is 93.5%, suggesting a tight market where most units are occupied. Given the median household income of $158,921, the average renter would be able to afford a 2BR unit at the FMR of $3960, which is only 29.9% of their income. However, the reality is that the median rental cost for a 2BR unit is likely much higher due to the high property values in the area. This indicates that the typical renter in 94116 is likely to have a higher income level, making it difficult for lower-income individuals to find affordable housing. #### Investor Angle From an investor perspective, the ZIP code 94116 presents a mixed picture. While the median home value is exceptionally high at $1,404,744, the FMRs are significantly lower. A 2BR unit at the FMR of $3960 would result in a negative cash flow if the investor were to finance the property at the median price. The monthly mortgage payment would be around $6,686, leaving a shortfall of $2,726 per month before accounting for maintenance and other expenses. This suggests that the ZIP is not cash-flow positive at the FMR for 2BR units. The investment grade for properties in this ZIP code would depend on the ability to secure tenants willing to pay above the FMR. Given the high median income and the limited supply of units, there might be opportunities for investors who can find ways to attract higher-paying tenants or those who do not rely solely on Section 8 vouchers. #### Specific Actionable Insights 1. **Focus on Larger Units**: Investors should consider larger units such as 3BR or 4BR homes, as the FMRs for these units are closer to the mortgage payments. For example, a 3BR unit at $5060 could potentially cover the mortgage payment of $6,686, especially if the investor can negotiate slightly higher rents. This would reduce the financial burden and make the investment more viable. 2. **Target Higher-Income Tenants**: Given the high median income and the tight market, targeting higher-income tenants who are not dependent on Section 8 vouchers could be a more profitable strategy. These tenants might be willing to pay the full market rent, which would alleviate the cash flow issues associated with renting at FMR. #### Bottom Line For investors focused specifically on Section 8 vouchers, ZIP code 94116 is not recommended. The high median home values and the significant gap between FMR and actual market rents make it difficult to achieve positive cash flow. Instead, investors should consider other ZIP codes with more favorable price-to-FMR ratios. If investing in 94116 is unavoidable, focus on larger units and target higher-income tenants to ensure profitability.

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.