Section 8 Fair Market Rent (FMR) for ZIP 94804 - 2027

Investment Score for ZIP 94804

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	$370,270	0.58%	F
2BR	$2,630	$525,522	0.5%	F
3BR	$3,360	$620,605	0.54%	F
4BR	$3,980	$670,396	0.59%	F
5BR	$4,617	$734,141	0.63%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94804 (Richmond, CA) #### Section 8 Voucher Dynamics In ZIP code 94804, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $2420 per month for the year 2026. This amount represents 31.9% of the median household income of $91,037. However, the actual rental market is significantly higher. The Zillow median price for a two-bedroom home in Richmond, CA, is $524,278, which translates to a monthly rent of approximately $2,621 based on a typical mortgage payment (assuming a 4.5% interest rate and a 30-year term). This results in a price-to-FMR ratio of 18.1x, indicating that actual rents are much higher than the FMR. Given these dynamics, voucher holders face significant constraints. The FMR is substantially lower than the actual market rates, making it challenging for them to find suitable housing within their budget. For instance, a voucher holder with a two-bedroom unit would have to find a landlord willing to accept $2420 when the market rate is closer to $2,621. This discrepancy can lead to fewer available options and potentially longer wait times for finding a place to live. #### Affordability & Renter Profile The population of Richmond, CA, is 44,891, with 46.4% of residents being renters. The occupancy rate is high at 95.8%, suggesting a tight rental market where demand exceeds supply. Given the median household income of $91,037, the majority of renters are likely middle-class individuals who work in nearby cities such as San Francisco or Oakland, where job opportunities are abundant but housing costs are prohibitive. The high occupancy rate and significant percentage of renters indicate that there is strong demand for rental properties in this area. However, the affordability gap between FMR and actual market rents suggests that many renters are paying a substantial portion of their income towards housing. This makes the market particularly sensitive to economic changes and could result in increased financial stress for tenants if incomes do not keep pace with rising rents. #### Investor Angle From an investor perspective, the ZIP code 94804 presents a mixed picture. While the actual market rents are high, the FMR set by HUD is significantly lower. To determine whether this ZIP code is cash-flow positive at FMR, we need to consider the typical operating expenses for rental properties. Assuming a conservative estimate of 50% of the rent going towards operating expenses (including maintenance, property taxes, insurance, and utilities), a two-bedroom unit rented at FMR would generate about $1,210 in net income per month ($2420 - 50%). However, the actual market rent of around $2,621 would yield a net income of approximately $1,310.50 per month. This indicates that while properties rented at FMR would still be profitable, they would generate less cash flow compared to those rented at market rates. The investment grade for this ZIP code would be considered moderate. The high occupancy rate and strong demand for rental properties make it a relatively safe investment. However, the reliance on Section 8 vouchers means that investors must navigate the complexities of government programs, which can include delays in payments and strict regulations. Additionally, the low FMR relative to market rates might limit the pool of potential tenants, especially if they prefer market-rate rentals due to better amenities or location. #### Specific Actionable Insights 1. **Targeting Market-Rate Rentals**: Investors should consider targeting market-rate rentals rather than relying solely on Section 8 vouchers. Although FMR units are profitable, the higher cash flow from market-rate rentals can provide better returns. For example, renting a two-bedroom unit at the market rate of $2,621 would yield a net income of $1,310.50 per month, compared to $1,210 for an FMR unit. 2. **Diversifying Tenant Base**: Diversify the tenant base to include both voucher holders and market-rate renters. This strategy can mitigate risks associated with delays in voucher payments and ensure steady cash flow. A balanced mix of tenants can also help maintain property values and improve overall management efficiency. 3. **Improving Property Value**: Focus on improving the value of rental properties to attract market-rate renters. Enhancing amenities, modernizing interiors, and ensuring good maintenance can justify higher rents and reduce dependency on Section 8 vouchers. For instance, a well-maintained property with updated appliances and finishes could command a premium over the FMR, leading to better financial performance. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 94804 is to **Hold**. While the market offers some opportunities, the significant gap between FMR and actual market rents means that relying solely on Section 8 vouchers would limit potential returns. Investors should consider diversifying their tenant base and enhancing property value to achieve better financial outcomes. The tight rental market and high occupancy rate provide a stable foundation, but the complexity of navigating government programs and the lower FMR suggest that a purely voucher-dependent strategy may not be optimal.

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.