Section 8 Fair Market Rent (FMR) for ZIP 94560 - 2027

Investment Score for ZIP 94560

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	$2,450
1 Bedroom	$2,690
2 Bedrooms	$3,290
3 Bedrooms	$4,210
4 Bedrooms	$4,980
5 Bedrooms	$5,777
6 Bedrooms	$6,470
7 Bedrooms	$6,988
8 Bedrooms	$7,337

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	$2,690	$441,202	0.61%	D
2BR	$3,290	$631,768	0.52%	F
3BR	$4,210	$1,121,732	0.38%	F
4BR	$4,980	$1,373,070	0.36%	F
5BR	$5,777	$1,751,529	0.33%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94560 (Newark, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 94560 in Newark, CA, for 2026 is set at $3,410 for a two-bedroom unit. This amount represents 24.2% of the median household income in the area, which stands at $169,064. However, the actual rent for a two-bedroom unit is significantly higher, with Zillow reporting a median price of $655,620. This translates to a price-to-FMR ratio of 16.0x, meaning that the actual rental costs are nearly 16 times the FMR. This high ratio presents significant constraints for voucher holders. The FMR is designed to ensure that housing is affordable for low-income families, but with actual rents being so much higher, it is likely that many voucher holders will struggle to find suitable housing. Landlords may be hesitant to accept vouchers due to the limited coverage they provide compared to market rates. For instance, a voucher holder would need to pay the difference between the FMR ($3,410) and the actual rent ($655,620), which is a substantial financial burden. #### Affordability & Renter Profile ZIP code 94560 has a population of 46,903, with 30.6% of residents being renters. The occupancy rate is quite high at 95.2%, indicating a tight rental market where there is little excess capacity. Given the median household income of $169,064, the majority of residents are likely to be middle to upper-middle class individuals or families who can afford the high rental prices. However, the 30.6% of renters suggest that there is still a segment of the population that relies on rental housing, including some who might benefit from Section 8 vouchers. Despite the high median income, the high rental prices make it difficult for lower-income residents to find affordable housing. The FMR is intended to help these individuals, but the gap between FMR and actual rents means that affordability remains a challenge. The tight market conditions also imply that there is little room for new rental units to enter the market without facing competition from existing properties, making it a challenging environment for both renters and landlords. #### Investor Angle From an investor perspective, the ZIP code 94560 is not likely to be cash-flow positive at the FMR levels. With the actual median rent for a two-bedroom unit being $655,620, investors would need to charge close to this amount to cover their costs and generate a profit. However, the FMR of $3,410 is far below this level, suggesting that landlords accepting Section 8 vouchers would face significant financial pressure. The investment grade for this ZIP code is likely to be low for Section 8-focused investors. The high price-to-FMR ratio indicates that the rental market is not aligned with the FMR, making it difficult to find properties that can be rented out at FMR levels while still covering expenses and generating a reasonable return. Additionally, the tight market conditions mean that there is limited opportunity for increasing rental income through vacancy or turnover. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider focusing on smaller units such as studios or one-bedroom apartments. These units have lower FMRs ($2,510 for 0BR and $2,790 for 1BR) and may be more affordable for voucher holders. While the rental income will be lower, it may be easier to find tenants willing to accept Section 8 vouchers for these units. 2. **Consider Subsidies and Programs**: Investors looking to operate in this ZIP code should explore additional subsidies and programs beyond just Section 8 vouchers. For example, the Low-Income Housing Tax Credit (LIHTC) program could provide additional financial support to offset the lower rental income from FMR-based units. This would improve the overall financial viability of the investment. 3. **Develop Relationships with Local Agencies**: Building relationships with local housing agencies and non-profits can help investors navigate the complexities of the rental market in 94560. These organizations often have insights into the needs of the community and can assist in finding tenants who qualify for various housing assistance programs, including Section 8. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market conditions, the recommendation for Section 8-focused investors is to **Skip** this ZIP code. The financial pressures associated with renting at FMR levels in a market where actual rents are so much higher make it difficult to achieve positive cash flow. Additionally, the limited number of properties that might be available at or near FMR levels suggests that there is little opportunity for significant returns. Investors should look for areas with a more favorable alignment between FMR and actual rental prices, or consider other types of investments that do not rely solely on Section 8 vouchers.

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.