Section 8 Fair Market Rent (FMR) for ZIP 94954 - 2027

Location: Santa Rosa-Petaluma, CA | Metro: Santa Rosa-Petaluma, CA MSA

Investment Score for ZIP 94954

Monthly Rent (2BR)

$3,390

Median Price (2BR)

$605,795

1% Rule

0.56%

Annual Yield

6.72%

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	$2,380
1 Bedroom	$2,590
2 Bedrooms	$3,390
3 Bedrooms	$4,690
4 Bedrooms	$5,160
5 Bedrooms	$5,986
6 Bedrooms	$6,704
7 Bedrooms	$7,240
8 Bedrooms	$7,602

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	$3,390	$605,795	0.56%	F
3BR	$4,690	$781,330	0.6%	D
4BR	$5,160	$906,003	0.57%	F
5BR	$5,986	$1,134,273	0.53%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

37,574

Median Household Income

$113,527

Housing Units

15,249

Renter Percentage

32.7%

Occupancy Rate

97.6%

Renter Occupied

4,859

Petaluma, CA, located in ZIP code 94954, serves as an ideal cash-flow anchor within a Section 8 portfolio strategy. The Federal Market Rent (FMR) for ZIP 94954 in fiscal year 2024 is set at $2,950, which is notably higher than the market average rental rate of $2,746. This creates a positive spread that ensures landlords receive above-market rents, enhancing their cash flow stability.

The median home value in Petaluma is $836,253, indicating a relatively high-cost area. However, the FMR is designed to compensate for such costs, ensuring that landlords can maintain a steady income stream even when property values are high. The consistent demand for affordable housing in this area supports the reliability of this spread, making it a secure choice for landlords seeking stable cash flows.

Cash Flow Anchor: With a significant spread between the FMR and market rates, Petaluma provides a solid foundation for generating predictable and favorable cash flows. This makes it a reliable component of any Section 8 portfolio, particularly for those who prioritize financial security over speculative growth.
Appreciation Play: While the 0.2% price-cut share suggests minimal need for discounts to attract tenants, the N/A-day Days on Market (DOM) indicates no recent data on how quickly properties are being rented out. This lack of data does not provide strong evidence for an appreciation play strategy.
Diversifier: Petaluma has a renter share of 32.7%, and the median income is $113,527. These figures suggest a diverse population with a mix of homeowners and renters, but the primary focus for a Section 8 strategy should be on the cash flow benefits rather than the diversification aspect.

In conclusion, Petaluma's ZIP 94954 is best positioned as a cash-flow anchor due to the substantial difference between the FMR and market rental rates. This strategic role offers landlords a reliable source of income, crucial for building a robust and sustainable Section 8 investment portfolio.

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.