Location: San Jose-Sunnyvale-Santa Clara, CA | Metro: San Jose-Sunnyvale-Santa Clara, CA HUD Metro FMR Area
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $2,220 |
| 1 Bedroom | $2,500 |
| 2 Bedrooms | $2,950 |
| 3 Bedrooms | $3,960 |
| 4 Bedrooms | $4,230 |
| 5 Bedrooms | $4,907 |
| 6 Bedrooms | $5,496 |
| 7 Bedrooms | $5,936 |
| 8 Bedrooms | $6,233 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,950 | $608,827 | 0.48% | F |
| 3BR | $3,960 | $1,569,586 | 0.25% | F |
| 4BR | $4,230 | $1,746,978 | 0.24% | F |
| 5BR | $4,907 | $1,969,137 | 0.25% | F |
U.S. Census Bureau data (2024)
The ZIP code 95118 in San Jose, CA, hosts a population of 32,015 individuals, with 38.3% being renters. This indicates a significant rental market presence, though it is not overwhelmingly dominated by renters. The median household income stands at a robust $152,682, which contrasts sharply with the average market rent of $3,379 per month.
To understand the financial impact on potential tenants, consider that the average monthly rent consumes approximately 14.5% of the median household income. This is calculated by taking the monthly rent ($3,379) and dividing it by the annual income ($152,682), then multiplying by 12 months. This percentage suggests that while rent is a considerable expense, it is manageable for the average household in this area.
The Fair Market Rent (FMR) for ZIP 95118, as determined for FY 2024, is set at $2,840. This figure is lower than the market rent, indicating that tenants relying solely on Section 8 vouchers might struggle to find affordable housing options without additional income sources. Landlords should be aware that the gap between the FMR and the market rent means that many voucher holders will require supplementary payments to cover the full cost of renting in this ZIP code.
In terms of tenant profiles, landlords can expect a mix of individuals and families who may have diverse financial situations but are generally capable of contributing to their rent. Given the relatively high income levels, tenants might include those working in tech industries or other high-paying sectors in San Jose. However, the scarcity of units that fit within the FMR range could limit the number of pure voucher holders able to secure housing.
Overall, ZIP 95118 presents a viable opportunity for landlords and small-portfolio investors interested in serving a Section 8 tenant pool, albeit with an understanding that typical rents exceed the FMR by about 19%. This implies that landlords must be prepared to negotiate or accept partial payments from vouchers combined with personal contributions from tenants to make ends meet.
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.