Location: Vallejo, CA | Metro: Sacramento--Roseville--Arden-Arcade, CA HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,180 |
| 1 Bedroom | $1,300 |
| 2 Bedrooms | $1,620 |
| 3 Bedrooms | $2,110 |
| 4 Bedrooms | $2,410 |
| 5 Bedrooms | $2,796 |
| 6 Bedrooms | $3,132 |
| 7 Bedrooms | $3,383 |
| 8 Bedrooms | $3,552 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,620 | $435,338 | 0.37% | F |
| 3BR | $2,110 | $480,903 | 0.44% | F |
| 4BR | $2,410 | $521,058 | 0.46% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP code 94571, which encompasses Rio Vista, CA, is centered around the discrepancy between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1780, whereas the Census ACS reports the market rent at $1,629. This means that the FMR is $151 higher than the market rent, representing an increase of approximately 9.3%. This gap makes Rio Vista a compelling opportunity for yield-focused investments.
The higher FMR compared to the market rent implies that landlords can receive a fixed rental payment that exceeds what they would typically charge in the open market. In Rio Vista, where only 18.1% of residents are renters and the median home value stands at $464,224, the demand for rental properties is relatively low. Consequently, the rental market is less competitive, allowing landlords to secure stable cash flows through Section 8 vouchers without the risk of losing potential tenants who might be unwilling to pay the higher FMR rate.
Given the median income of $87,740 in Rio Vista, the financial stability of voucher tenants is a significant advantage. Unlike the open market, where there's a higher risk of non-payment due to economic fluctuations, Section 8 tenants have their rent subsidized by the government, ensuring timely payments and reducing the likelihood of default. This financial security translates into a steady stream of income for landlords, making it a strategic investment choice despite the lower percentage of renters in the area.
However, it's important to note that accepting Section 8 tenants comes with its own set of challenges. Landlords must adhere to HUD regulations, which can include regular inspections and maintenance standards. The initial setup and ongoing management might require additional resources, but the long-term benefits, including guaranteed rental income and reduced vacancy rates, outweigh these costs in a market where the FMR significantly outpaces the average market rent.
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.