Section 8 Fair Market Rent (FMR) for ZIP 95136 - 2027

Investment Score for ZIP 95136

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	$2,370
1 Bedroom	$2,670
2 Bedrooms	$3,150
3 Bedrooms	$4,230
4 Bedrooms	$4,510
5 Bedrooms	$5,232
6 Bedrooms	$5,860
7 Bedrooms	$6,329
8 Bedrooms	$6,645

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	$2,670	$604,437	0.44%	F
2BR	$3,150	$783,332	0.4%	F
3BR	$4,230	$1,220,249	0.35%	F
4BR	$4,510	$1,460,210	0.31%	F
5BR	$5,232	$1,604,312	0.33%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95136 (San Jose, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95136 in San Jose, CA, is set by HUD for 2026. For a two-bedroom unit, the FMR is $3370. However, the actual median rent for a two-bedroom unit in this ZIP code is significantly higher, at $810,365 according to Zillow. This means that the price-to-FMR ratio is approximately 20.0x, indicating that actual rents are 20 times higher than the FMR. This stark difference poses significant challenges for tenants using Section 8 vouchers, as they will likely struggle to find units within their budget. The FMR is only 28.4% of the median household income in the area, which further highlights the affordability gap faced by low-income renters. #### Affordability & Renter Profile ZIP code 95136 has a population of 48,056, with 41.1% of residents being renters. The occupancy rate is very high at 97.5%, suggesting that the rental market is quite tight. Given the median household income of $142,433, it is clear that the majority of residents have relatively high incomes. However, those relying on Section 8 vouchers will find it extremely difficult to afford housing in this ZIP code. The median rent for a two-bedroom unit is $810,365, far exceeding the FMR of $3370, making it a challenging environment for low-income renters. #### Investor Angle From an investor perspective, the ZIP code 95136 presents a mixed picture. While the median rent for a two-bedroom unit is $810,365, the FMR is only $3370. This means that properties rented at FMR levels would be highly unlikely to generate positive cash flow due to the extreme disparity between the two figures. Additionally, the high occupancy rate indicates a strong demand for rental units, but the high actual rents suggest that the market is primarily catering to higher-income individuals rather than those who might benefit from Section 8 vouchers. Given these factors, the investment grade for properties in this ZIP code, particularly those targeting Section 8 tenants, would be considered low. The primary constraint is the difficulty in finding tenants willing to pay the FMR when the actual market rents are so much higher. Investors seeking to capitalize on the rental market in 95136 should consider focusing on higher-end units that can command premium rents, rather than those that might be eligible for Section 8 vouchers. #### Specific Actionable Insights 1. **Focus on Higher-End Units**: Given the high median household income and the tight rental market, investors should focus on developing or acquiring higher-end units that can command the actual market rents. For example, a two-bedroom unit priced at $810,365 would be more likely to attract tenants and generate positive cash flow compared to a property priced at the FMR of $3370. 2. **Consider Mixed-Income Developments**: To balance the need for affordable housing with the realities of the market, investors could explore mixed-income developments. This approach involves creating a mix of units at different price points, including some that are affordable to lower-income residents. By doing so, developers can ensure that the overall project remains financially viable while still providing some level of affordability. 3. **Engage with Local Housing Authorities**: Since the FMR is significantly lower than the actual market rents, engaging with local housing authorities to understand potential subsidies or incentives for affordable housing projects could be beneficial. This could help bridge the gap between the FMR and the actual rents, making it more feasible to offer units to Section 8 voucher holders. #### Bottom Line For investors focused specifically on Section 8 vouchers, the ZIP code 95136 would be a challenging market to enter. The extreme disparity between the FMR and actual market rents makes it difficult to find tenants who can use their vouchers effectively. Therefore, the recommendation is to **skip** this ZIP code for Section 8-focused investments. Instead, investors should look into areas where the FMR is closer to actual market rents, or consider developing mixed-income projects that can cater to a broader range of tenants. --- This analysis provides a detailed overview of the rental market dynamics in ZIP code 95136, highlighting the significant challenges for both tenants and investors in the context of Section 8 vouchers. The high median household income and tight rental market make it an unfeasible option for low-income renters, and thus, not a suitable investment for those looking to cater to this demographic.

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.