Section 8 Fair Market Rent (FMR) for ZIP 94591 - 2027

Investment Score for ZIP 94591

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	$2,060
1 Bedroom	$2,280
2 Bedrooms	$2,990
3 Bedrooms	$3,800
4 Bedrooms	$4,450
5 Bedrooms	$5,162
6 Bedrooms	$5,781
7 Bedrooms	$6,243
8 Bedrooms	$6,555

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
2BR	$2,990	$409,784	0.73%	D
3BR	$3,800	$534,385	0.71%	D
4BR	$4,450	$670,606	0.66%	D
5BR	$5,162	$740,593	0.7%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94591 (Vallejo, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Vallejo, CA (ZIP 94591) in 2026 is set at $2,520 for a two-bedroom unit. This amount represents 28.9% of the median household income in the area, which stands at $104,550. However, the actual rental market is significantly higher, with Zillow reporting a median price for a two-bedroom unit at $405,544. The price-to-FMR ratio of 13.4x indicates that the actual rent prices far exceed the FMR, creating a significant gap between what is considered fair market rent and the actual rent charged by landlords. This disparity means that Section 8 voucher holders face substantial constraints when trying to find suitable housing. The FMR is designed to reflect the average rent for a modest apartment in the area, but with actual rents being so much higher, many voucher holders may struggle to find units that accept their vouchers. Landlords who do accept Section 8 vouchers may be limited to a smaller pool of tenants willing to pay the FMR, which could result in lower occupancy rates and potentially less desirable tenants. #### Affordability & Renter Profile Vallejo has a population of 58,193, with 33.2% of residents being renters. This indicates a moderate rental market, where approximately one-third of the population relies on rental properties. The occupancy rate of 96.2% suggests that the rental market is relatively tight, with most available units being occupied. Given the high actual rent prices compared to the FMR, it is likely that the majority of renters in Vallejo are middle-class individuals who can afford the higher costs. For those relying on Section 8 vouchers, the situation is more challenging due to the limited number of units that accept these vouchers and the high cost of living in the area. The median household income of $104,550 implies that the typical resident has a decent financial standing, which supports the higher rent prices. However, the FMR for a two-bedroom unit at $2,520 is only 28.9% of this median income, indicating that while the overall income level is high, the affordability of housing for low-income families remains a concern. The tight market conditions make it difficult for low-income households to secure affordable housing, especially if they rely solely on Section 8 vouchers. #### Investor Angle From an investor's perspective, Vallejo's rental market presents both opportunities and challenges. The actual rent prices are significantly higher than the FMR, which means that landlords who accept Section 8 vouchers are likely to experience lower cash flows compared to those who charge market rates. For instance, a landlord renting a two-bedroom unit at the FMR would receive $2,520 per month, whereas the market rate is closer to $405,544, which translates to approximately $3,380 per month based on typical mortgage payments and property taxes. Given the high actual rent prices, the investment grade for properties in Vallejo is mixed. While the potential for higher returns exists, the risk of lower occupancy rates among voucher holders must be considered. Additionally, the regulatory requirements and administrative burden associated with accepting Section 8 vouchers can be significant, further impacting the profitability of such investments. #### Specific Actionable Insights 1. **Focus on Units Accepting Higher Rents**: Investors should consider properties that can command market rents rather than those strictly tied to FMR. A two-bedroom unit rented at the market rate of $3,380 per month would provide a much better cash flow compared to the FMR of $2,520. This strategy aligns with the high actual rent prices and the tight market conditions. 2. **Diversify Tenant Base**: To mitigate the risk of lower occupancy rates among voucher holders, investors might want to diversify their tenant base by offering a mix of units that cater to different income levels. This approach could include a combination of units that accept Section 8 vouchers and those that appeal to middle-class renters willing to pay market rates. 3. **Consider Property Upgrades**: Given the high demand and tight market, investors might benefit from upgrading properties to attract higher-paying tenants. Improvements such as modern kitchens, updated bathrooms, and energy-efficient appliances can justify higher rents and improve the overall desirability of the units. #### Bottom Line For investors focused specifically on Section 8 vouchers, Vallejo, CA (ZIP 94591) presents a challenging market due to the significant gap between FMR and actual rent prices. The recommendation would be to **Skip** investing in properties strictly tied to FMR, as the cash flow would likely be insufficient given the high cost of living and the tight rental market. Instead, investors should consider properties that can command market rents or explore other areas where the FMR is closer to the actual rent prices, ensuring better financial returns and occupancy rates.

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.