Section 8 Fair Market Rent (FMR) for ZIP 94901 - 2027

Investment Score for ZIP 94901

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	$2,240
1 Bedroom	$2,680
2 Bedrooms	$3,250
3 Bedrooms	$4,150
4 Bedrooms	$4,550
5 Bedrooms	$5,278
6 Bedrooms	$5,911
7 Bedrooms	$6,384
8 Bedrooms	$6,703

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	$2,680	$630,916	0.42%	F
2BR	$3,250	$869,426	0.37%	F
3BR	$4,150	$1,334,750	0.31%	F
4BR	$4,550	$1,880,099	0.24%	F
5BR	$5,278	$2,548,695	0.21%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 94901 (San Rafael, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 94901, as set by HUD for 2026, is $3120 for a two-bedroom unit. This represents 32.5% of the median household income of $96,000, which is calculated based on the provided median income of $115,330. The FMR is designed to reflect the average rent levels in the area, but it often falls short of actual market rents, especially in high-cost areas like San Rafael. Actual rents in San Rafael are significantly higher than the FMR. For instance, the Zillow median price for a two-bedroom unit is $855,316, which translates to a monthly rental cost of approximately $3563, assuming a 5% annual return on investment. This results in a price-to-FMR ratio of 22.8x, indicating that actual market rents are about 22.8 times higher than the FMR. This means that tenants using Section 8 vouchers would find it challenging to secure housing in the area without facing substantial rent gaps. The constraints for voucher holders are significant. With a median household income of $115,330, the FMR for a two-bedroom unit is only 32.5% of the median income, suggesting that many households in San Rafael could afford higher rents. However, voucher holders are limited to the FMR, which is far below the actual market rates. As a result, they may struggle to find landlords willing to accept their vouchers, particularly for units that are priced closer to the market rate. #### Affordability & Renter Profile San Rafael has a population of 41,307, with 49.0% of residents being renters. The occupancy rate is 96.3%, indicating a very tight rental market where most available units are occupied. Given the high median household income of $115,330, the typical renter in San Rafael likely earns above the national average and can afford higher rents. However, the high proportion of renters suggests that there is a significant demand for affordable housing options. The median income level supports the notion that San Rafael is a relatively affluent area, but the high rent-to-income ratio indicates that the rental market is still quite expensive. The Zillow median price for a two-bedroom unit of $855,316 further underscores this point, as it implies a monthly rental cost of around $3563, which is well above the FMR. This tight market makes it difficult for low-income families to find suitable housing, even with the assistance of Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 94901 presents both opportunities and challenges. The FMR for a two-bedroom unit is $3120, while the actual market rent is estimated at $3563. This gap suggests that landlords who accept Section 8 vouchers may face lower cash flow compared to those who rent at market rates. However, the strong demand for rentals and the high occupancy rate indicate that properties are likely to remain occupied, providing stability for investors. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the costs associated with owning and managing rental properties. Assuming a conservative estimate of operating expenses, property taxes, and mortgage payments, the total cost per month for a two-bedroom unit could be around $2500-$3000. At an FMR of $3120, the net cash flow would be positive, albeit modest. This makes the ZIP code viable for investors who are willing to accept lower returns in exchange for stable occupancy. The investment grade for this ZIP code can be considered moderate to high. While the cash flow is not exceptionally high, the strong demand and high occupancy rate provide a solid foundation for investment. Additionally, the potential for appreciation in property values due to the high cost of living and limited supply of affordable housing adds another layer of value for long-term investors. #### Specific Actionable Insights 1. **Target Affordable Units**: Investors should focus on acquiring properties that are priced close to the FMR. For example, a two-bedroom unit priced at $3120 would be ideal for Section 8 tenants and would ensure steady cash flow. Properties priced significantly above this amount may struggle to attract voucher holders. 2. **Consider Property Enhancements**: To make properties more attractive to voucher holders, investors might consider making targeted improvements that increase the perceived value of the units without drastically increasing the rent. For instance, adding energy-efficient appliances or updating the kitchen and bathroom could enhance the appeal of a property without pushing the rent beyond the FMR. 3. **Diversify Tenant Base**: While targeting Section 8 tenants can be a viable strategy, diversifying the tenant base to include market-rate renters can help mitigate the risk of lower cash flow. This approach allows investors to benefit from the higher market rents while still maintaining a portion of their portfolio dedicated to affordable housing. #### Bottom Line Given the high cost of living and the tight rental market in San Rafael, the ZIP code 94901 presents a mixed picture for Section 8-focused investors. While the FMR is significantly lower than actual market rents, the strong demand and high occupancy rates make it a viable option. However, the modest cash flow at FMR levels suggests that investors should carefully evaluate their goals and risk tolerance. **Recommendation**: Hold. Investors who already own properties in this ZIP code should continue to hold them, given the stable occupancy and potential for appreciation. New investors should proceed with caution, focusing on properties that are priced close to the FMR and considering strategies to enhance the appeal of these units to Section 8 tenants. Diversification into market-rate rentals could also be a prudent approach to balance the portfolio and improve overall cash flow.

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.