Section 8 Fair Market Rent (FMR) for ZIP 95350 - 2027

Investment Score for ZIP 95350

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	$1,270
1 Bedroom	$1,370
2 Bedrooms	$1,790
3 Bedrooms	$2,390
4 Bedrooms	$2,810
5 Bedrooms	$3,260
6 Bedrooms	$3,651
7 Bedrooms	$3,943
8 Bedrooms	$4,140

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,370	$291,071	0.47%	F
2BR	$1,790	$352,468	0.51%	F
3BR	$2,390	$431,078	0.55%	F
4BR	$2,810	$504,071	0.56%	F
5BR	$3,260	$578,843	0.56%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95350 (Modesto, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95350 is set by HUD for the year 2026. For a two-bedroom unit, the FMR is $1750 per month. This figure represents the maximum amount that a Section 8 voucher holder can be expected to pay towards rent. However, the actual rents in Modesto are significantly higher. The Zillow median price for a two-bedroom rental property is $350,750, which translates into a monthly rent of approximately $1670 based on a 16.7x price-to-rent ratio. Given that the FMR is $1750, it suggests that the actual rent is slightly below the FMR, but only marginally so. The constraints for voucher holders in this area are significant. They must find units that accept vouchers and do not exceed the FMR. With the FMR being close to the actual rent, there is little room for negotiation or flexibility. Additionally, landlords who accept Section 8 vouchers often face bureaucratic hurdles and longer lease durations, which can be a deterrent. #### Affordability & Renter Profile ZIP code 95350 has a population of 57,136, with 43.2% of residents being renters. This indicates a substantial demand for rental properties. The occupancy rate is high at 96.8%, suggesting that the market is relatively tight, with few vacant units available. The median household income in the area is $75,621. For a two-bedroom unit, the FMR of $1750 represents about 27.8% of the median income. This percentage is relatively low, indicating that the FMR is designed to be affordable for the average resident. However, given the high proportion of renters and the tight occupancy rate, it is likely that many residents are paying more than the FMR, especially those without access to Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 95350 presents a mixed picture. The FMR for a two-bedroom unit is $1750, which is slightly above the estimated actual rent based on the Zillow median price. This suggests that there could be some cash flow potential for investors who are willing to accept Section 8 vouchers. However, the actual rents are still quite high relative to the median income, which could indicate a risk if the local economy were to weaken. The investment grade for this ZIP code would depend on several factors, including the stability of the local economy, the demand for rental properties, and the willingness of landlords to accept Section 8 vouchers. Given the high occupancy rate and the significant number of renters, there is a strong demand for rental housing. However, the high actual rents suggest that there might be a limited supply of units that are truly affordable under the FMR guidelines. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Investors should focus on acquiring units that are priced below the FMR to ensure they can attract and retain Section 8 voucher holders. A two-bedroom unit priced at $1750 or less would be ideal. Given the Zillow median price, units that are priced at around $350,000 or less would likely fall into this category. 2. **Understand Local Economy**: It is crucial to understand the local economic conditions. If the median income remains stable or increases, the affordability of the FMR will improve. Conversely, if there is a downturn, the high rent-to-income ratio could become problematic. Monitoring local job growth and unemployment rates can provide insights into the stability of the local economy. 3. **Engage with Landlords**: Engaging with local landlords to understand their perspectives on accepting Section 8 vouchers can help identify opportunities. Some landlords might be willing to accept vouchers despite the administrative challenges, especially if they have units that are difficult to rent otherwise. #### Bottom Line For Section 8-focused investors, ZIP code 95350 presents a moderate opportunity. The market is tight, with high occupancy rates and a significant number of renters. However, the actual rents are close to the FMR, leaving little room for profit unless the investor can secure units below the FMR. Given these factors, the recommendation would be to **Hold**. While there is potential for cash flow, the risks associated with the high rent-to-income ratio and the administrative burden of accepting Section 8 vouchers make it a cautious investment. Investors should carefully evaluate individual units and consider the broader economic context before making any purchases.

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.