Section 8 Fair Market Rent (FMR) for ZIP 95023 - 2027

Investment Score for ZIP 95023

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	$2,280
1 Bedroom	$2,300
2 Bedrooms	$3,010
3 Bedrooms	$4,160
4 Bedrooms	$4,560
5 Bedrooms	$5,290
6 Bedrooms	$5,925
7 Bedrooms	$6,399
8 Bedrooms	$6,719

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	$3,010	$598,388	0.5%	F
3BR	$4,160	$722,102	0.58%	F
4BR	$4,560	$835,162	0.55%	F
5BR	$5,290	$889,318	0.59%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95023 (Hollister, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95023, as set by HUD for 2026, is $2830 for a two-bedroom unit. This represents 29.2% of the median household income in the area, which stands at $116,314. The FMR is designed to ensure that renter households can afford housing without compromising other basic needs. However, the actual rental market in Hollister is significantly higher than the FMR. For instance, the Zillow median price for a two-bedroom home is $587,438, which translates to a monthly mortgage payment of approximately $2,770 based on a 4.5% interest rate and a 30-year fixed mortgage. This is already close to the FMR for a two-bedroom unit, but it does not account for property taxes, insurance, and maintenance costs, which would further increase the total cost. Given these figures, voucher holders face significant constraints. They must find landlords willing to accept the voucher amount, which is often lower than what the market demands. This can be challenging in a competitive rental market where many units are priced above the FMR. Additionally, the voucher program only covers up to 70% of the rent, meaning tenants must pay the remaining 30%. For a two-bedroom unit priced at $2830, the tenant would need to contribute about $849 per month, which could be difficult for low-income families. #### Affordability & Renter Profile ZIP code 95023 has a population of 59,889, with 31.9% of residents being renters. The occupancy rate is high at 97.2%, indicating a tight rental market with limited availability. Given the median household income of $116,314, the majority of residents are likely middle-class individuals or families who can afford higher rents. However, the 31.9% of renters represent a significant portion of the population that may struggle with affordability, especially those relying on Section 8 vouchers. The high occupancy rate suggests that there is strong demand for rental properties, which could drive up rents and make it even harder for voucher holders to find suitable housing. The median income is relatively high, which means that the typical renter profile is someone who can afford higher rents, but still, a substantial number of residents rely on affordable housing options like Section 8. #### Investor Angle From an investor perspective, the ZIP code 95023 presents both opportunities and challenges. The FMR for a two-bedroom unit is $2830, while the Zillow median price suggests a much higher rental value. The price-to-FMR ratio is 17.3x, which indicates that the market is highly inflated compared to the FMR. This makes it difficult for investors to achieve positive cash flow if they are strictly adhering to the FMR guidelines. To determine the investment grade, we need to consider the potential for rental income versus the costs of ownership. Based on the Zillow median price of $587,438, the monthly mortgage payment alone would be around $2,770. Adding property taxes, insurance, and maintenance costs, the total monthly expenses could easily exceed the FMR. Therefore, the investment grade for this ZIP code is likely to be low for Section 8-focused investors due to the high costs of ownership and the difficulty in finding tenants willing to pay the full FMR. #### Specific Actionable Insights 1. **Target Larger Units**: Since the FMR for larger units (3BR and 4BR) is higher ($3840 and $4080 respectively), investors might find better cash flow opportunities by focusing on these unit types. These larger units are more likely to attract families who can benefit from the higher voucher amounts. 2. **Seek Out-of-Voucher Tenants**: Given the high median income and the tight rental market, there is a significant opportunity to target tenants who do not require Section 8 assistance. These tenants are more likely to pay market rates, which can be substantially higher than the FMR. For example, a two-bedroom unit could potentially command a rent of over $2,800, well above the FMR of $2830. #### Bottom Line For Section 8-focused investors, ZIP code 95023 is a challenging market due to the high costs of ownership and the inflated rental values. The recommendation is to **Skip** this ZIP code unless you can find a way to reduce your overall costs or target larger units where the FMR is higher. If you decide to invest, focus on attracting tenants who can pay market rates rather than relying solely on Section 8 vouchers. This will provide a more stable and profitable investment scenario.

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.