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: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,590 | $326,875 | 0.49% | F |
| 3BR | $2,200 | $369,814 | 0.59% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate scenario for ZIP 95319 (Empire, CA) provides a clear picture of rental income potential versus median home values. For the fiscal year 2024, the Fair Market Rent (FMR) for a 2-bedroom apartment is set at $1230 per month. Annualizing this figure yields an annual rental income of $14,760. Given the median home value of $357,825, the implied gross yield for a property rented under Section 8 would be approximately 4.13%. This is calculated by dividing the annual rental income ($14,760) by the median home value ($357,825).
In contrast, the market rent for a similar 2-bedroom apartment in ZIP 95319, based on Census ACS data, stands at $1,150 per month. When annualized, this translates to an annual rental income of $13,800. Using the same median home value of $357,825, the implied gross yield for market rent is about 3.86%, derived from dividing the annual rental income ($13,800) by the median home value ($357,825).
The gross-yield comparison between the two scenarios reveals that renting through Section 8 offers a higher gross yield of 4.13% compared to the market rent's gross yield of 3.86%. However, the reality of the situation must also consider the local rental market dynamics. With a renter density of 46.8%, there is a significant portion of the population seeking rental housing, which could support both market and Section 8 rents.
The lack of specific Days on Market (DOM) data makes it difficult to predict how quickly properties might be leased under either scenario. However, given the higher gross yield from Section 8, it presents a more attractive option for landlords and small-portfolio investors looking to secure a stable and predictable income stream. The slightly lower market rent yield, while still respectable, leaves room for fluctuations based on market conditions and tenant preferences.
In conclusion, the Section 8 program offers a marginally better gross yield in ZIP 95319, making it a viable option for investors seeking consistent returns. The higher yield, combined with the substantial renter population, suggests that Section 8 rentals could provide a steady source of income without the volatility often associated with market rates.
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.