Section 8 Fair Market Rent (FMR) for ZIP 95301 - 2027

Investment Score for ZIP 95301

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	$1,120
1 Bedroom	$1,180
2 Bedrooms	$1,420
3 Bedrooms	$1,950
4 Bedrooms	$2,330
5 Bedrooms	$2,703
6 Bedrooms	$3,027
7 Bedrooms	$3,269
8 Bedrooms	$3,432

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	$1,420	$309,090	0.46%	F
3BR	$1,950	$396,968	0.49%	F
4BR	$2,330	$471,916	0.49%	F
5BR	$2,703	$562,017	0.48%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95301 (Atwater, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95301 in Atwater, California, as of 2026, is set at $1550 for a two-bedroom unit. This represents 27.2% of the median household income in the area, which is $68,349. However, the actual rental market price for a two-bedroom unit is significantly higher, with Zillow reporting a median price of $310,076. This translates to a price-to-FMR ratio of 16.7x, indicating that actual rents far exceed the FMR. For Section 8 voucher holders, this means that they face significant constraints in finding affordable housing. The voucher program is designed to cover up to 100% of the rent if it falls below the FMR, but in a market where the actual rent is so much higher, many voucher holders will struggle to find landlords willing to accept their vouchers. For example, a landlord renting out a two-bedroom unit for $310,076 would only receive $1550 per month under the voucher program, which is likely insufficient to cover the costs associated with the property. #### Affordability & Renter Profile With a population of 43,009 and a renter percentage of 43.4%, Atwater has a substantial number of renters. Given the occupancy rate of 98.0%, it is clear that the rental market is very tight, with little room for new entrants or additional supply. The median household income of $68,349 suggests that the majority of residents are middle-class workers who may be employed in local industries such as agriculture, manufacturing, or retail. The high price-to-FMR ratio indicates that the rental market is not aligned with the affordability standards set by HUD. This mismatch creates a challenging environment for low-income renters, especially those relying on Section 8 vouchers. The fact that 43.4% of the population are renters implies a strong demand for housing, but the limited supply and high prices make it difficult for many to secure a place to live. #### Investor Angle From an investor perspective, the ZIP code 95301 presents a mixed picture. While the rental market is tight and there is a high demand for housing, the actual rents are far above the FMR. This makes it difficult for investors to achieve positive cash flow when adhering strictly to the FMR guidelines. For instance, a two-bedroom unit priced at $310,076 would generate approximately $2584 per month in rent, while the FMR is only $1550. This means that landlords accepting Section 8 vouchers would need to rely heavily on subsidies and other sources of income to break even. In terms of investment grade, the ZIP code 95301 is rated as moderate risk due to the high price-to-FMR ratio and the potential difficulty in attracting tenants who can afford the market rates. However, given the high occupancy rate and the significant proportion of renters, there is still a solid underlying demand for housing, which could provide some stability. #### Specific Actionable Insights 1. **Target Larger Units**: Given the high FMR for larger units, investors might consider focusing on three-bedroom or four-bedroom properties. The FMR for a three-bedroom unit is $2130, and for a four-bedroom unit, it is $2580. These higher FMRs may better align with market rents, making it easier to achieve positive cash flow. For example, a three-bedroom unit rented at $2584 per month would be closer to the FMR of $2130, reducing the gap between market rates and subsidized rents. 2. **Consider Non-Section 8 Tenants**: Due to the significant disparity between FMR and market rents, investors should also consider renting to non-Section 8 tenants. This would allow them to charge market rates and potentially achieve higher returns. For instance, a two-bedroom unit rented at $2584 per month would generate a monthly income nearly 1.7 times the FMR, providing a more sustainable financial model. 3. **Develop Relationships with Local Agencies**: Investors should develop relationships with local housing agencies and community organizations to understand the dynamics of the rental market better. This could help in identifying opportunities for government assistance programs that may bridge the gap between FMR and market rents, thereby improving the viability of Section 8 investments. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors is to **Skip** this ZIP code unless they can find ways to mitigate the financial risks associated with the large gap between FMR and market rents. Investors looking for more stable returns should consider areas with a lower price-to-FMR ratio or explore alternative investment strategies that do not rely solely on Section 8 vouchers. ### Summary ZIP code 95301 (Atwater, CA) has a median household income of $68,349 and a renter population of 43.4%. The FMR for a two-bedroom unit is $1550, which is only 27.2% of the median income, while the actual market rent is $310,076, resulting in a price-to-FMR ratio of 16.7x. This makes it challenging for Section 8 voucher holders to find affordable housing and for investors to achieve positive cash flow. The tight rental market and high occupancy rate indicate strong demand, but the mismatch between FMR and market rents poses significant risks. Therefore, investors should skip this ZIP code unless they can find ways to bridge the financial gap or diversify their tenant base beyond Section 8 voucher holders.

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.