Section 8 Fair Market Rent (FMR) for ZIP 95112 - 2027

Investment Score for ZIP 95112

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	$2,180
1 Bedroom	$2,460
2 Bedrooms	$2,900
3 Bedrooms	$3,900
4 Bedrooms	$4,160
5 Bedrooms	$4,826
6 Bedrooms	$5,405
7 Bedrooms	$5,837
8 Bedrooms	$6,129

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	$2,460	$566,865	0.43%	F
2BR	$2,900	$869,210	0.33%	F
3BR	$3,900	$1,085,229	0.36%	F
4BR	$4,160	$1,274,941	0.33%	F
5BR	$4,826	$1,400,868	0.34%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95112 (San Jose, CA) #### Section 8 Voucher Dynamics In ZIP code 95112, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $3,060 per month for 2026. However, the actual rental market price for a two-bedroom unit is significantly higher, with a Zillow median price of $905,367. This translates to a price-to-FMR ratio of 24.7 times, indicating that the actual market rent far exceeds the FMR. For instance, if we assume a typical market rent of $3,000 for a two-bedroom unit, it would be approximately 24.7 times the FMR. This means that Section 8 voucher holders face significant constraints in finding suitable housing within their budget. The FMR is only 41.2% of the median household income, suggesting that even without vouchers, many residents struggle to afford housing. #### Affordability & Renter Profile ZIP 95112 has a population of 57,373, with 73.6% of households being renters. The occupancy rate stands at 91.3%, indicating a high demand for rental properties. Given the median household income of $89,103, the majority of renters are likely to be middle-income workers, possibly employed in tech-related industries given San Jose’s reputation as a tech hub. The high rent-to-income ratio and the fact that 73.6% of households are renters suggest that this is a tight market where supply is not meeting demand, leading to higher rents and reduced affordability for many residents. #### Investor Angle From an investor perspective, the ZIP code 95112 presents a challenging scenario for cash flow when relying solely on FMR. If an investor aims to achieve cash flow positivity, they would need to consider the actual market rent rather than the FMR. For example, a two-bedroom property rented at the FMR of $3,060 would generate less revenue compared to renting it at the market rate of around $3,000, which is still below the Zillow median but much closer to the actual rental prices. The investment grade can be assessed by comparing the FMR to the mortgage payment and other expenses. Assuming a conservative mortgage rate of 5% and a property value of $905,367, the monthly mortgage payment would be approximately $4,527. This does not include property taxes, insurance, maintenance, and other costs, which could easily push the total expenses above the FMR. Therefore, the investment grade in this ZIP code is low for properties rented at FMR, as the rental income would not cover the mortgage and other expenses. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should focus on smaller units such as studios or one-bedroom apartments, which have lower FMRs. For instance, the FMR for a one-bedroom unit is $2,620, which is still significantly below the market rent but offers a better chance of covering expenses. Additionally, these units tend to be more affordable for voucher holders, increasing the likelihood of securing tenants. 2. **Consider Property Value Adjustments**: Investors should look for properties with lower values, ideally under $700,000, to ensure that the mortgage payment aligns more closely with the FMR. A property valued at $700,000 would have a monthly mortgage payment of about $3,500, which is closer to the FMR for a two-bedroom unit ($3,060). This would provide a more balanced approach to achieving cash flow positivity while still offering affordable housing options. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors is to **skip** this ZIP code. The actual market rents far exceed the FMR, making it difficult to find properties that can be rented out profitably at the FMR. Even if an investor manages to secure a tenant with a voucher, the rental income would likely fall short of covering the mortgage and other expenses associated with owning a property in this area. Therefore, investing in ZIP code 95112 would not be financially viable for those relying on Section 8 vouchers for rental income.

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.