Section 8 Fair Market Rent (FMR) for ZIP 94539 - 2027

Investment Score for ZIP 94539

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	$2,830
1 Bedroom	$3,100
2 Bedrooms	$3,800
3 Bedrooms	$4,870
4 Bedrooms	$5,760
5 Bedrooms	$6,682
6 Bedrooms	$7,484
7 Bedrooms	$8,083
8 Bedrooms	$8,487

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	$3,100	$510,300	0.61%	D
2BR	$3,800	$839,135	0.45%	F
3BR	$4,870	$1,696,626	0.29%	F
4BR	$5,760	$2,481,359	0.23%	F
5BR	$6,682	$3,165,026	0.21%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94539 (Fremont, CA) #### Section 8 Voucher Dynamics In ZIP code 94539, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $4,050 per month for the year 2026. However, the Zillow median price for a two-bedroom home in this area is $870,773, which translates to a price-to-FMR ratio of 17.9x. This indicates that the actual rent prices in the market are significantly higher than the FMR. For instance, if we assume a typical rental yield of 1% based on the median price, the monthly rent would be approximately $8,708, which is more than double the FMR. This creates significant constraints for voucher holders. The FMR represents the maximum amount that a Section 8 voucher can cover, but since actual rents far exceed this figure, voucher holders may struggle to find suitable housing. They might need to supplement the voucher with additional funds, which could be challenging given the high cost of living in the area. #### Affordability & Renter Profile ZIP 94539 has a median household income of $243,552, which is quite high compared to national averages. Given that 21.0% of the population are renters, it suggests that there is a substantial demand for rental properties. However, the occupancy rate of 95.9% indicates that the market is relatively tight, with very few vacant units available. The affordability issue becomes even more pronounced when considering the FMR for a two-bedroom unit, which is only 20.0% of the median income. This means that a household earning the median income would spend just $49,224 annually on rent, which is far below the actual market rent of $8,708 per month. Consequently, the majority of renters in this area likely fall into lower-income brackets or have additional sources of income to support their housing costs. #### Investor Angle From an investor perspective, the cash flow potential at FMR levels is limited due to the high purchase prices and low FMR relative to market rents. If an investor were to purchase a two-bedroom property at the Zillow median price of $870,773 and rent it out at the FMR of $4,050, they would face a significant shortfall. Assuming a mortgage rate of 5%, the monthly mortgage payment would be around $4,337, leaving a negative cash flow of about $287 per month before accounting for other expenses such as maintenance, insurance, and property taxes. Given these dynamics, the investment grade for this ZIP code would be considered low for Section 8-focused investors. The primary challenge lies in the fact that the FMR is substantially lower than the market rent, making it difficult to achieve positive cash flow. Additionally, the high purchase price and tight market conditions suggest that finding tenants who qualify for Section 8 vouchers could be challenging. #### 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. The FMR for a one-bedroom unit is $3,320, which is still significantly lower than the market rent but offers a better chance of finding qualified tenants. The median household income is high enough that some households might be willing to pay the FMR for smaller units. 2. **Consider Multi-Family Properties**: Instead of single-family homes, multi-family properties might offer a more viable option. These properties often have lower purchase prices per unit and can spread the fixed costs across multiple units. Investors should look for multi-family complexes where the average rent per unit is closer to the FMR. 3. **Explore Subsidized Housing Programs**: Investors might want to explore other subsidized housing programs that offer higher rent subsidies. For example, the Low-Income Housing Tax Credit (LIHTC) program allows for higher rent amounts while still providing assistance to low-income families. This could help bridge the gap between the FMR and the actual market rent. #### Bottom Line For Section 8-focused investors, the ZIP code 94539 presents a challenging environment due to the high purchase prices and low FMR relative to market rents. The recommendation is to **skip** this ZIP code unless you can find smaller units or multi-family properties where the FMR is closer to the market rent. Alternatively, exploring other subsidized housing programs might provide a more financially feasible option. Given the current data, the investment potential for Section 8 properties in this area is not favorable.

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.