Section 8 Fair Market Rent (FMR) for ZIP 95209 - 2027

Investment Score for ZIP 95209

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	$1,630
1 Bedroom	$1,740
2 Bedrooms	$2,150
3 Bedrooms	$2,980
4 Bedrooms	$3,590
5 Bedrooms	$4,164
6 Bedrooms	$4,664
7 Bedrooms	$5,037
8 Bedrooms	$5,289

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$2,150	$364,480	0.59%	F
3BR	$2,980	$449,255	0.66%	D
4BR	$3,590	$512,601	0.7%	D
5BR	$4,164	$597,135	0.7%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95209 (Stockton, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95209 in Stockton, CA, is set by HUD for 2026. For a two-bedroom unit, the FMR is $1940 per month. This represents approximately 21.4% of the median household income of $108,675, indicating that it is a relatively affordable rent for the average resident. However, the actual rents in the area can be significantly higher. According to Zillow, the median price for a two-bedroom home in this ZIP code is $363,407, which translates to a monthly mortgage payment of around $1500-$1800 based on typical financing terms. When considering property taxes, insurance, and maintenance costs, the total cost of ownership can easily exceed the FMR. For voucher holders, the constraints are clear: they can only afford units up to the FMR. Given the high price-to-FMR ratio of 15.6x, it suggests that actual rental prices are much higher than the FMR. This means that voucher holders face significant challenges in finding affordable housing within their budget. The disparity between FMR and actual rents could lead to a shortage of available units for Section 8 voucher holders, potentially resulting in long wait times and limited options. #### Affordability & Renter Profile ZIP code 95209 has a population of 47,409, with 25.9% of residents being renters. The occupancy rate stands at 97.5%, indicating a very tight market where almost all available units are occupied. The median household income of $108,675 is relatively high compared to the national average, suggesting that many residents have the financial capacity to afford higher rents. However, the 25.9% of renters might include individuals who are less financially stable and rely heavily on the affordability provided by the FMR. Given the high price-to-FMR ratio, it is likely that the majority of renters in this ZIP code are paying well above the FMR. This tight market condition implies that there is little room for new rental properties unless they can offer competitive pricing or unique amenities that justify higher rents. The high occupancy rate also indicates that any new rental units would likely be quickly absorbed by the market, but the challenge remains in attracting tenants willing to pay the FMR. #### Investor Angle From an investor perspective, the ZIP code 95209 presents both opportunities and challenges. The FMR for a two-bedroom unit is $1940, but the actual median rent is likely much higher given the price-to-FMR ratio of 15.6x. If an investor were to purchase a property at the median price of $363,407 and aim to rent it out at the FMR, they would need to ensure that the property is well-maintained and competitively priced to attract Section 8 voucher holders. To determine if this ZIP code is cash-flow positive at the FMR, we need to consider the total cost of ownership. Assuming a 20% down payment, a 30-year fixed-rate mortgage at 5%, and additional costs such as property taxes (1.25% of the property value), insurance ($1000 annually), and maintenance ($1000 annually), the monthly mortgage payment would be approximately $1500-$1800. Property taxes would add about $300-$350 per month, while insurance and maintenance would contribute another $200-$250 per month. Therefore, the total monthly cost of ownership would be around $2000-$2400, which exceeds the FMR of $1940. This indicates that investing in properties for Section 8 voucher holders in ZIP code 95209 would likely result in negative cash flow. Additionally, the high price-to-FMR ratio suggests that the market is overpriced relative to the FMR, making it difficult for investors to find properties that can be rented out profitably at the FMR. #### Specific Actionable Insights 1. **Focus on Lower-Rent Units**: Investors should focus on acquiring properties that are priced below the median, particularly those that can be rented out at or near the FMR. For example, a one-bedroom unit with an FMR of $1550 might be more feasible for positive cash flow, especially if the property can be purchased at a lower price point. 2. **Consider Multi-Family Properties**: Single-family homes may not be the best option due to the high price-to-FMR ratio. Instead, multi-family properties might offer better opportunities. These properties can often be acquired at a lower price per unit and may have lower operating costs per unit, making them more suitable for renting out at the FMR. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 95209 is to **skip** purchasing single-family homes at the median price. The high price-to-FMR ratio and the likelihood of negative cash flow make this a challenging market for such investments. Instead, investors should look for lower-priced properties or consider multi-family units where economies of scale can help manage costs and improve profitability. In summary, while the ZIP code offers a strong demand for rental properties, the current market conditions do not favor positive cash flow for Section 8-focused investments in single-family homes.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.