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 | $2,250 |
| 1 Bedroom | $2,550 |
| 2 Bedrooms | $3,000 |
| 3 Bedrooms | $4,030 |
| 4 Bedrooms | $4,300 |
| 5 Bedrooms | $4,988 |
| 6 Bedrooms | $5,587 |
| 7 Bedrooms | $6,034 |
| 8 Bedrooms | $6,336 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,550 | $440,714 | 0.58% | F |
| 2BR | $3,000 | $602,117 | 0.5% | F |
| 3BR | $4,030 | $1,084,075 | 0.37% | F |
| 4BR | $4,300 | $1,428,755 | 0.3% | F |
| 5BR | $4,988 | $1,765,776 | 0.28% | F |
U.S. Census Bureau data (2024)
The median family income in ZIP 95133 (San Jose, CA) for 2024 is reported to be $142,170. This figure is critical when considering whether the Fair Market Rent (FMR) of $2,650 will sufficiently cover the mortgage on a home priced at $1,181,342. To determine if this FMR can cover the mortgage, one must calculate the monthly mortgage payment based on prevailing interest rates and loan terms. However, with a median family income of $142,170, it's reasonable to expect that tenants earning above this average could afford the FMR.
The rental vacancy rate in ZIP 95133 stands at 44.6%. A skeptical investor might question if this percentage indicates sufficient tenant demand. In reality, a high vacancy rate suggests a competitive rental market, which is favorable for landlords who can attract tenants by offering amenities or maintaining property quality. The key metric here is the number of renters relative to available units, and with a median income of $142,170, there is likely a substantial pool of potential renters capable of paying the FMR.
The HUD voucher payment standard for ZIP 95133 is set at $2,650, significantly below the market rent of $3,587. An investor concerned about whether vouchers will keep pace with market rents has a valid point. While the voucher amount is lower, it's important to note that voucher holders often supplement the difference themselves, making them viable tenants. Additionally, the payment standard may increase in future years to better match market rents, but this trend is not guaranteed and requires monitoring.
To summarize, while the FMR of $2,650 may not fully cover the mortgage on a $1,181,342 home, the median family income of $142,170 supports the likelihood of finding tenants willing to pay the FMR. The 44.6% rental vacancy rate indicates a competitive market, but also a large number of potential renters. Lastly, although the HUD voucher payment standard is currently lower than the market rent, it does not preclude the possibility of finding suitable tenants among voucher holders.
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.