Location: Modesto, CA | Metro: Modesto, CA MSA
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 | $1,130 |
| 1 Bedroom | $1,230 |
| 2 Bedrooms | $1,590 |
| 3 Bedrooms | $2,200 |
| 4 Bedrooms | $2,550 |
| 5 Bedrooms | $2,958 |
| 6 Bedrooms | $3,313 |
| 7 Bedrooms | $3,578 |
| 8 Bedrooms | $3,757 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,590 | $601,976 | 0.26% | F |
| 3BR | $2,200 | $793,383 | 0.28% | F |
U.S. Census Bureau data (2024)
In evaluating ZIP 95303, Crows Landing, CA, for potential investment, several key concerns arise regarding the financial viability and demand for rental properties. One primary objection is whether the Fair Market Rent (FMR) of $1,230 for the fiscal year 2024 will sufficiently cover the mortgage on a home priced at $750,726. To address this, it's important to consider the typical mortgage terms. A median-priced home in this area would likely have a monthly mortgage payment of around $3,000 to $3,500 depending on interest rates and down payment. Given the FMR, it's evident that relying solely on rental income to cover the mortgage would be insufficient. However, investors should also factor in appreciation of property values and other potential income streams such as rental increases over time.
Another concern is the level of renter demand, which stands at 56.5%. This percentage indicates that slightly more than half of the housing units are rented out. While this figure might seem low, it's crucial to note that demand can vary widely based on local economic conditions and job availability. Crows Landing, being part of the agricultural heartland of California, benefits from seasonal labor demands, which can boost rental occupancy rates during certain times of the year. Additionally, the proximity to larger urban centers like Modesto can attract renters seeking affordable living options outside major cities.
The final objection pertains to the ability of Housing Choice Vouchers to keep pace with market rents, currently averaging $1,114. The voucher amount is designed to cover a significant portion of the rent but not necessarily the entire cost. As of now, the average voucher payment is around $700 to $800 per month. This means that landlords would need to subsidize the remaining balance, which could range from $300 to $400 per month. While this subsidy is required, it's worth noting that the stability and reliability of tenants using vouchers often offset the financial gap. Furthermore, the federal government periodically adjusts voucher amounts to better align with market conditions, though these adjustments may not always match the exact market rent.
In summary, while the FMR does not fully cover the mortgage on a median-priced home, the potential for property value appreciation and additional income sources can mitigate this risk. The rental demand, though not extremely high, is supported by local economic factors. Lastly, although voucher payments do not cover the entire market rent, they provide a stable tenant base and the possibility of future adjustments to the voucher amounts.
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.