Section 8 Fair Market Rent (FMR) for ZIP 94122 - 2027

Investment Score for ZIP 94122

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	$2,370
1 Bedroom	$2,770
2 Bedrooms	$3,410
3 Bedrooms	$4,460
4 Bedrooms	$5,020
5 Bedrooms	$5,823
6 Bedrooms	$6,522
7 Bedrooms	$7,044
8 Bedrooms	$7,396

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	$2,770	$1,036,814	0.27%	F
2BR	$3,410	$1,538,050	0.22%	F
3BR	$4,460	$1,811,813	0.25%	F
4BR	$5,020	$2,118,998	0.24%	F
5BR	$5,823	$2,301,036	0.25%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94122, San Francisco, CA #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 94122 in San Francisco is set by HUD for 2026. For a two-bedroom apartment, the FMR is $3,310. However, the actual rental market price for a two-bedroom unit is significantly higher. According to Zillow, the median price for a two-bedroom rental property in this area is $1,466,231, which translates to a monthly rent of approximately $12,218 based on a typical mortgage payment. This results in a price-to-FMR ratio of 36.9x, indicating that actual rents are much higher than the FMR. Given these figures, it is clear that there is a significant gap between the FMR and the actual rental prices. This means that tenants who rely on Section 8 vouchers will find it extremely challenging to secure housing in this ZIP code. The constraints for voucher holders are severe, as they would need to find landlords willing to accept a rent that is far below the market rate. #### Affordability & Renter Profile ZIP code 94122 has a median household income of $146,250, which is quite high. Despite this, 51.8% of residents are renters, suggesting that even though incomes are relatively high, owning a home is out of reach for many due to the astronomical real estate prices. The occupancy rate stands at 92.3%, indicating that the market is tight and there is little surplus in terms of available units. The affordability issue is further highlighted by the fact that the FMR for a two-bedroom unit represents only 27.2% of the median income. This suggests that while the FMR is designed to be affordable, it is still a substantial portion of the average resident's income. In a market where the median price for a two-bedroom rental is $1,466,231, the majority of residents, especially those relying on Section 8 vouchers, will struggle to find affordable housing. #### Investor Angle From an investor perspective, the ZIP code 94122 presents a unique challenge. The FMR for a two-bedroom unit is $3,310, but the actual market rent is $12,218. This means that if an investor were to purchase a property and rent it out at the FMR, they would likely incur significant losses. The cash flow would be negative, given the disparity between the FMR and the market rent. In terms of investment grade, the ZIP code 94122 is rated poorly for Section 8-focused investors. The high price-to-FMR ratio indicates that the properties are overpriced relative to what HUD considers fair market value. This makes it difficult for investors to find profitability in the Section 8 program, as the rents they can charge under the program are far below what the market demands. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors might consider focusing on smaller units such as studios or one-bedroom apartments. The FMR for a one-bedroom unit is $2,730, which is still a fraction of the market rent. However, the demand for smaller units might be lower, and the potential for higher returns on larger units is more significant. 2. **Consider Alternative Investment Strategies**: Instead of relying solely on Section 8 vouchers, investors could explore alternative strategies such as short-term rentals or converting properties into co-living spaces. These options might provide better cash flow and returns compared to traditional long-term rentals at FMR rates. #### Bottom Line For Section 8-focused investors, the ZIP code 94122 is not recommended. The extremely high price-to-FMR ratio and the tight rental market make it challenging to find profitable opportunities. Investors should either skip this ZIP code entirely or consider alternative investment strategies that do not rely on government-subsidized rents. The recommendation is to **skip** this ZIP code for Section 8 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.