Section 8 Fair Market Rent (FMR) for ZIP 95207 - 2027

Investment Score for ZIP 95207

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	$1,540
1 Bedroom	$1,640
2 Bedrooms	$2,030
3 Bedrooms	$2,810
4 Bedrooms	$3,390
5 Bedrooms	$3,932
6 Bedrooms	$4,404
7 Bedrooms	$4,756
8 Bedrooms	$4,994

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	$1,640	$145,894	1.12%	B
2BR	$2,030	$268,657	0.76%	D
3BR	$2,810	$413,506	0.68%	D
4BR	$3,390	$479,029	0.71%	D
5BR	$3,932	$554,988	0.71%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95207 (Stockton, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95207 is set by HUD for 2026, with the following figures: - 0BR: $1300 - 1BR: $1410 - 2BR: $1760 (30.4% of median income) - 3BR: $2450 - 4BR: $2950 These FMRs represent the maximum rent that a Section 8 voucher holder can pay. However, the actual rents in the area often exceed these amounts. For instance, the Zillow median price for a 2BR property in 95207 is $267,203, which translates to a monthly mortgage payment of approximately $1,270 assuming a 4.5% interest rate and 30-year fixed mortgage. This is already close to the 2BR FMR of $1760, indicating that landlords who want to participate in the Section 8 program must keep their rental rates below this threshold. Given the high percentage of renters (58.4%) and occupancy rate (93.3%), there is significant demand for rental properties. However, the tight market conditions mean that many units are priced above the FMR, limiting the number of available options for voucher holders. Landlords who wish to attract Section 8 tenants need to ensure that their rents do not exceed the FMR limits. #### Affordability & Renter Profile ZIP code 95207 has a median household income of $69,455. The 2BR FMR represents 30.4% of this median income, suggesting that it aligns reasonably well with the affordability needs of the local population. Given the high renter percentage (58.4%), the majority of residents are likely to be renting, and many could be relying on Section 8 vouchers to manage their housing costs. The occupancy rate of 93.3% indicates that the market is relatively tight, with few vacant units available. This suggests that there is strong competition among renters, which could drive up rental prices. However, the high renter percentage also implies that there is a substantial pool of potential tenants, including those who might use Section 8 vouchers. #### Investor Angle For investors focusing on Section 8 properties, the key question is whether the FMR levels allow for positive cash flow. Based on the Zillow median price for a 2BR property ($267,203), the estimated monthly mortgage payment would be around $1,270. If we assume a typical operating cost of about 50% of the gross rent, the net rent after expenses would be approximately $880 for a 2BR unit at the FMR of $1760. This means that the cash flow from a 2BR unit would be around $490 per month ($1760 - $1,270). While this is positive, it is important to note that the price-to-FMR ratio of 12.7x suggests that property values are significantly higher than the FMR. This could indicate that the market is overpriced relative to the rental income that can be generated under the Section 8 program. In terms of investment grade, the high price-to-FMR ratio and the limited number of units that can be rented at FMR levels suggest that the investment risk is higher. Investors should carefully consider the potential for lower returns and the challenges of finding tenants willing to pay the full FMR. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as 0BR and 1BR apartments. These units have lower FMRs but are still likely to generate positive cash flow when compared to the estimated mortgage payments. For example, a 0BR unit with an FMR of $1300 would still provide a net rent of around $30 per month after accounting for the mortgage payment of $1,270. 2. **Consider Renovation Projects**: Investors might find value in purchasing older properties at lower prices and renovating them to meet modern standards while keeping the rent within FMR limits. This strategy can help in achieving better cash flow and attracting Section 8 tenants who are looking for quality living spaces. 3. **Explore Multi-Family Properties**: Multi-family properties can offer economies of scale, allowing investors to spread out the mortgage and operating costs across multiple units. A multi-family property with several 0BR or 1BR units could potentially generate a higher overall cash flow, making it a more attractive investment option. #### Bottom Line For investors focused on Section 8 properties, ZIP code 95207 presents a mixed picture. While there is strong demand for rental properties and a significant portion of the population relies on Section 8 vouchers, the high price-to-FMR ratio poses a challenge. The recommendation for this ZIP code is to **Hold** if you already own properties that are generating positive cash flow. For new investors, the recommendation is to **Skip** unless they can find properties that are significantly undervalued or can be renovated to fit within the FMR guidelines while still providing a reasonable return on investment.

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.