Section 8 Fair Market Rent (FMR) for ZIP 94577 - 2027

Investment Score for ZIP 94577

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	$2,030
1 Bedroom	$2,230
2 Bedrooms	$2,730
3 Bedrooms	$3,500
4 Bedrooms	$4,140
5 Bedrooms	$4,802
6 Bedrooms	$5,378
7 Bedrooms	$5,808
8 Bedrooms	$6,098

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	$2,230	$367,540	0.61%	D
2BR	$2,730	$678,821	0.4%	F
3BR	$3,500	$826,045	0.42%	F
4BR	$4,140	$981,626	0.42%	F
5BR	$4,802	$1,105,310	0.43%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94577 (San Leandro, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for San Leandro, CA (ZIP 94577), in 2026 is set at $2750 for a two-bedroom unit. This amount represents 30.3% of the median household income in the area, which is $108,772. However, the actual rent for a two-bedroom unit in San Leandro, based on Zillow data, is significantly higher at $692,092. This means that the price-to-FMR ratio is 21.0x, indicating that the actual rental prices are far above what the FMR suggests. For voucher holders, this creates a significant constraint. The FMR is designed to cover the cost of housing that is considered modest but adequate for low-income families. Given that the actual median rent for a two-bedroom unit is so much higher than the FMR, voucher holders would find it extremely difficult to secure housing without substantial out-of-pocket expenses. In practice, landlords might be hesitant to accept vouchers due to the high discrepancy between the FMR and the actual market rates, potentially leading to a shortage of available units for those relying solely on Section 8 vouchers. #### Affordability & Renter Profile San Leandro has a population of 46,317, with 44.5% of residents being renters. This indicates a significant portion of the local population relies on rental housing. The occupancy rate of 94.6% suggests that the rental market is quite tight, with very few vacant units available. Given the high median household income and the fact that the Zillow median price for a two-bedroom unit is $692,092, it is clear that the rental market is geared towards middle and upper-middle-class individuals. The high price-to-FMR ratio further underscores the affordability challenges faced by lower-income households. For these residents, finding affordable housing can be particularly challenging, especially when considering that the FMR is only a fraction of the actual rental costs. #### Investor Angle From an investor perspective, the ZIP code 94577 presents both opportunities and challenges. The FMR for a two-bedroom unit is $2750, while the actual median rent is $692,092. This stark difference means that properties rented at FMR levels would likely generate negative cash flow, as the rental income would fall well short of covering mortgage payments, maintenance, and other operating costs associated with owning a property in this area. The investment grade for this ZIP code is relatively low for Section 8-focused investors. The high price-to-FMR ratio of 21.0x makes it unlikely that landlords can rely solely on FMR to break even, let alone make a profit. Therefore, investors looking to participate in the rental market through Section 8 vouchers would need to consider alternative strategies to ensure financial viability, such as targeting properties with below-market rents or seeking additional subsidies beyond the standard Section 8 voucher. #### Specific Actionable Insights 1. **Target Below-Market Properties**: Investors should focus on acquiring properties where the rent is closer to the FMR rather than the median market rent. For instance, a two-bedroom unit renting at $2750 would be more financially viable than one renting at $692,092. This strategy would help mitigate the risk of negative cash flow and align better with the needs of Section 8 voucher holders. 2. **Seek Additional Subsidies**: Given the high discrepancy between FMR and actual rents, investors could explore additional government programs or community-based initiatives that provide supplementary funding to make up the shortfall. This could include state or local housing assistance programs that offer additional financial support to landlords who accept Section 8 vouchers. 3. **Consider Multi-Family Units**: While the FMR for a two-bedroom unit is $2750, the FMR for larger units like three-bedroom ($3520) and four-bedroom ($4170) units is higher. Investors might find it more profitable to target multi-family units that can accommodate larger families, thereby receiving higher voucher amounts and potentially achieving positive cash flow. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP 94577 is to **Skip** this market. The high price-to-FMR ratio and the tight rental market suggest that relying solely on Section 8 vouchers would result in significant financial losses. Investors should look for areas where the FMR is closer to the actual market rents or seek additional subsidies to make their investments viable.

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.