Section 8 Fair Market Rent (FMR) for ZIP 94403 - 2027

Investment Score for ZIP 94403

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	$3,130
1 Bedroom	$3,650
2 Bedrooms	$4,490
3 Bedrooms	$5,870
4 Bedrooms	$6,610
5 Bedrooms	$7,668
6 Bedrooms	$8,588
7 Bedrooms	$9,275
8 Bedrooms	$9,739

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	$3,650	$563,586	0.65%	D
2BR	$4,490	$1,231,899	0.36%	F
3BR	$5,870	$1,876,411	0.31%	F
4BR	$6,610	$2,373,119	0.28%	F
5BR	$7,668	$2,683,865	0.29%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94403 (San Mateo, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 94403 in San Mateo, CA, is set by HUD for 2026. For a two-bedroom apartment, the FMR is $4,440. However, the Zillow median price for a two-bedroom home in this area is $1,237,809, which translates to a monthly rent of approximately $10,315 based on typical rental yields. This results in a price-to-FMR ratio of 23.2x, indicating that the actual market rents far exceed the FMR levels. This discrepancy poses significant challenges for Section 8 voucher holders. The vouchers are designed to cover up to the FMR, but landlords in this high-rent market may be reluctant to accept them due to the substantial gap between the voucher amount and the market rent. Consequently, voucher holders might struggle to find affordable housing options within the ZIP code, as the FMR is only 30.5% of the median household income, suggesting that even the FMR is relatively high compared to local incomes. #### Affordability & Renter Profile ZIP code 94403 has a population of 43,276, with 47.5% of residents being renters. The occupancy rate stands at 92.2%, indicating a robust demand for rental properties. Given the median household income of $174,917, the majority of residents can afford higher rents, but this also means that the market is tight and competitive for those who cannot meet the high costs. The high median income suggests that many residents have the financial capacity to pay market rates, but the large percentage of renters indicates a significant portion of the population relies on rental housing. The high occupancy rate further underscores the limited availability of rental units, making it a challenging environment for lower-income individuals seeking affordable housing. #### Investor Angle From an investor perspective, the ZIP code 94403 presents a mixed picture. While the FMRs are significantly lower than the market rents, they still represent a substantial amount. For instance, the FMR for a two-bedroom unit is $4,440, which is already quite high. However, the actual market rents are much higher, averaging around $10,315 per month for a two-bedroom property. Given these figures, it is unlikely that an investor would find the ZIP code cash-flow positive if they were strictly adhering to the FMR guidelines. The FMRs are well below the market rents, and landlords who accept Section 8 vouchers would be leaving significant revenue on the table. This makes the ZIP code less attractive for investors looking to maximize their returns through rental income. In terms of investment grade, ZIP code 94403 would likely be considered a high-risk, low-reward area for Section 8-focused investors. The extremely high price-to-FMR ratio means that landlords accepting vouchers would need to rely heavily on subsidies, which can be unpredictable and subject to changes in government policy. #### 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 $3,670, which is still significantly lower than the market rent but might offer a better balance between affordability and potential cash flow. Investors could aim to acquire properties where the market rent is closer to the FMR, thereby reducing the gap and increasing the likelihood of finding tenants willing to pay the FMR. 2. **Consider Subsidies Beyond Section 8**: Due to the high cost of living in San Mateo, investors should explore other subsidy programs that might provide additional support. For example, California’s state-level subsidies or local initiatives could help bridge the gap between FMR and market rents. Additionally, investors could look into properties that qualify for Low-Income Housing Tax Credits (LIHTC), which can provide financial incentives to offset the lower rents. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 94403 is to **Skip**. The extremely high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow while adhering to the FMR guidelines. Additionally, the high median income and occupancy rate suggest that the demand for affordable housing is limited, and the competition for tenants willing to pay FMR is intense. Investors should consider other ZIP codes with more favorable price-to-FMR ratios and less competitive markets to ensure better returns and stability.

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.