Section 8 Fair Market Rent (FMR) for ZIP 94601 - 2027

Investment Score for ZIP 94601

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	$1,930
1 Bedroom	$2,150
2 Bedrooms	$2,630
3 Bedrooms	$3,360
4 Bedrooms	$3,980
5 Bedrooms	$4,617
6 Bedrooms	$5,171
7 Bedrooms	$5,585
8 Bedrooms	$5,864

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	$2,150	$414,723	0.52%	F
2BR	$2,630	$506,416	0.52%	F
3BR	$3,360	$590,431	0.57%	F
4BR	$3,980	$651,865	0.61%	D
5BR	$4,617	$721,154	0.64%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94601 (Oakland, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 94601 in Oakland, California, is set by HUD for 2026. For a two-bedroom apartment, the FMR is $2,420. This figure represents 40.1% of the median household income in the area, which stands at $72,359. However, the actual rental market price for a two-bedroom unit, according to Zillow, is $504,916, leading to a price-to-FMR ratio of 17.4x. This means that the actual market rent for a two-bedroom apartment is significantly higher than the FMR, making it challenging for Section 8 voucher holders to find suitable housing within their budget. The voucher system caps the rent at the FMR, so landlords would need to accept $2,420 per month for a two-bedroom unit, which is far below the market rate. This creates a significant constraint for voucher holders, as they may struggle to secure housing that meets their needs. #### Affordability & Renter Profile ZIP code 94601 has a high renter population percentage of 63.6%, indicating that a majority of residents are renters rather than homeowners. The occupancy rate is also quite high at 94.9%, suggesting that there is a strong demand for rental properties in this area. Given the high renter population and occupancy rate, combined with the relatively low median household income compared to the high market rent, it is clear that this is a tight market where affordability is a significant concern. The median household income of $72,359 is barely sufficient to cover the FMR for a two-bedroom unit, let alone the actual market rent. Therefore, the typical renter profile in this ZIP code likely includes individuals and families who are economically disadvantaged and heavily reliant on affordable housing options, such as those supported by Section 8 vouchers. #### Investor Angle From an investor’s perspective, the ZIP code 94601 presents a mixed picture. The FMR for a two-bedroom unit is $2,420, but the actual market rent is $504,916, which translates to approximately $2,000 per month based on typical mortgage and property management costs. If an investor were to purchase a property in this ZIP code and rent it out under the Section 8 program, they would be limited to charging $2,420 per month. This is significantly lower than the market rent, which could make the investment less attractive from a cash flow standpoint. To determine if this ZIP code is cash-flow positive at the FMR, we need to consider the typical mortgage payment, property taxes, insurance, and maintenance costs. Assuming a mortgage rate of 5% and a 20% down payment, the monthly mortgage payment for a $504,916 property would be around $2,500. Adding property taxes (estimated at 1.25% of the property value), insurance (approximately $100 per month), and maintenance costs (around 1% of the property value), the total monthly expenses would exceed the FMR of $2,420. Therefore, it is unlikely that an investor would achieve positive cash flow solely through Section 8 rents in this ZIP code. The investment grade for this ZIP code would be considered low due to the high market rent compared to the FMR, which limits the potential income from Section 8 tenants. Additionally, the high renter population and occupancy rate suggest that there is a strong demand for rental units, but the economic conditions indicate that many potential tenants may struggle to afford even the FMR. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors might consider focusing on smaller units, such as one-bedroom apartments, which have an FMR of $1,990. While still below market rates, these units may be more accessible to Section 8 voucher holders and could potentially offer better cash flow opportunities. 2. **Consider Non-Section 8 Tenants**: Investors should explore the possibility of renting to non-Section 8 tenants who can pay closer to market rates. This strategy would require marketing efforts to attract tenants willing to pay the higher market rents, but it could significantly improve cash flow and overall profitability. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 94601 is to **Skip**. The high price-to-FMR ratio indicates that the market rent is substantially higher than what Section 8 vouchers can cover, making it difficult to find suitable properties for positive cash flow. Additionally, the tight market conditions and high occupancy rates suggest that there is limited availability of affordable housing, further complicating the ability to attract and retain Section 8 tenants. Instead, investors might want to look into other ZIP codes with lower price-to-FMR ratios or consider alternative investment strategies that do not rely solely on Section 8 rents.

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.