Section 8 Fair Market Rent (FMR) for ZIP 95111 - 2027

Investment Score for ZIP 95111

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	$1,800
1 Bedroom	$2,040
2 Bedrooms	$2,400
3 Bedrooms	$3,220
4 Bedrooms	$3,440
5 Bedrooms	$3,990
6 Bedrooms	$4,469
7 Bedrooms	$4,827
8 Bedrooms	$5,068

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	$2,040	$467,931	0.44%	F
2BR	$2,400	$584,050	0.41%	F
3BR	$3,220	$1,011,175	0.32%	F
4BR	$3,440	$1,167,463	0.29%	F
5BR	$3,990	$1,235,753	0.32%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95111 (San Jose, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 95111 (San Jose, CA) for 2026 are as follows: - 0BR: $1940 - 1BR: $2190 - 2BR: $2540 - 3BR: $3330 - 4BR: $3620 These FMRs represent the maximum rent that a Section 8 voucher holder can pay. However, the actual rents in the area are significantly higher. For instance, the Zillow median price for a 2BR unit is $598,624, which translates to a monthly rental cost of approximately $2,500 based on typical mortgage rates and property tax costs. This means that the actual rental prices in the area are roughly 19.6 times higher than the FMR for a 2BR unit. This high price-to-FMR ratio places significant constraints on voucher holders. They will find it challenging to secure housing within their budget, especially considering that the FMR for a 2BR unit is only $2,540, while the average rental price is much higher. The disparity between FMR and actual rents suggests that voucher holders will likely have limited options and may struggle to find suitable housing. #### Affordability & Renter Profile ZIP code 95111 has a population of 57,202, with 40.1% of residents being renters. The median household income is $101,435, indicating a relatively affluent area. Given that the FMR for a 2BR unit is 30.0% of the median income, it is clear that the majority of renters would need to spend a substantial portion of their income on housing. The occupancy rate of 96.4% indicates a tight market, where most available units are already occupied. This tightness exacerbates the affordability issue, as there is little room for new rentals to enter the market and potentially drive down prices. Additionally, the high percentage of renters suggests a strong demand for rental properties, but the supply is constrained by the high occupancy rate. #### Investor Angle From an investor’s perspective, the ZIP code 95111 presents a challenging environment for cash flow-positive investments at FMR levels. With the Zillow median price for a 2BR unit at $598,624, the monthly rental cost would be around $2,500, far exceeding the FMR of $2,540. This implies that landlords who rely solely on Section 8 vouchers would likely face financial difficulties unless they can secure higher-paying tenants or subsidies. The investment grade for this ZIP code is low due to the high price-to-FMR ratio and the limited number of voucher holders who can afford the actual rents. Investors should consider the broader rental market dynamics and potential for subsidies beyond just the FMR to determine if the investment is viable. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors might want to focus on smaller units such as 0BR or 1BR apartments. These units have lower FMRs ($1940 and $2190 respectively), making them more feasible for Section 8 voucher holders. While the profit margin may be lower, these units are more likely to be rented out without long vacancies. 2. **Seek Additional Subsidies**: To make investments in larger units (2BR, 3BR, 4BR) financially viable, investors should explore additional subsidy programs or partnerships with local government agencies. These programs can help bridge the gap between FMR and actual rental prices, ensuring steady cash flow. #### Bottom Line For Section 8-focused investors, the recommendation is to **Skip** this ZIP code. The high price-to-FMR ratio and tight rental market make it difficult to achieve positive cash flow using only Section 8 vouchers. Instead, investors should consider areas with lower ratios and more affordable rental markets. If investing in 95111 is unavoidable, focus on smaller units and seek additional subsidies to ensure financial viability.

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.