Location: Merced, CA | Metro: Merced, 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 | $1,120 |
| 1 Bedroom | $1,180 |
| 2 Bedrooms | $1,420 |
| 3 Bedrooms | $1,950 |
| 4 Bedrooms | $2,320 |
| 5 Bedrooms | $2,691 |
| 6 Bedrooms | $3,014 |
| 7 Bedrooms | $3,255 |
| 8 Bedrooms | $3,418 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,420 | $289,589 | 0.49% | F |
| 3BR | $1,950 | $387,522 | 0.5% | F |
| 4BR | $2,320 | $479,288 | 0.48% | F |
| 5BR | $2,691 | $546,682 | 0.49% | F |
U.S. Census Bureau data (2024)
With a Fair Market Rent (FMR) set at $1400 for ZIP 95340 in Merced, CA, landlords can expect to receive payments that closely match the local housing market conditions. The Zillow Observed Rental Index (ZORI) indicates a market rent of $1,720, suggesting that properties in this area are slightly above the FMR threshold, which could impact the attractiveness of the location to Section 8 participants. The median home value stands at $406,220, providing a solid foundation for property investments, but also reflecting a significant gap between the typical homeowner's equity and the rental market dynamics.
The 42.8% renter share highlights a robust demand for rentals in the area, a positive sign for landlords looking to maximize occupancy rates. However, the median income of $71,193 must be considered when evaluating the potential for long-term tenancy stability. This figure is crucial for understanding the financial capacity of tenants, especially those relying on government assistance programs such as Section 8.
Average Days on Market (DOM) of 20 for rental properties in this ZIP code suggests a fast-moving market, beneficial for investors seeking quick turnovers. Conversely, the 0.2% price-cut share reflects a stable pricing environment where landlords have little need to reduce their asking rents to attract tenants.
In summary, the data paints a picture of a balanced rental market in ZIP 95340, with strong tenant demand and limited need for rent adjustments. The disparity between the FMR and market rent, however, presents a challenge for Section 8 participants seeking affordable housing. For landlords, the combination of high renter share and low DOM indicates a favorable environment for rental operations. Given these factors, the verdict on Section 8 participation in Merced, CA is cautiously optimistic, with careful consideration required to align with the financial realities of both landlords and tenants.
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.