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 | $1,380 |
| 1 Bedroom | $1,490 |
| 2 Bedrooms | $1,950 |
| 3 Bedrooms | $2,610 |
| 4 Bedrooms | $3,060 |
| 5 Bedrooms | $3,550 |
| 6 Bedrooms | $3,976 |
| 7 Bedrooms | $4,294 |
| 8 Bedrooms | $4,509 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,950 | $391,395 | 0.5% | F |
| 3BR | $2,610 | $461,617 | 0.57% | F |
| 4BR | $3,060 | $556,342 | 0.55% | F |
| 5BR | $3,550 | $645,045 | 0.55% | F |
U.S. Census Bureau data (2024)
Modesto’s 95355 ZIP code, located in the city’s northwestern quadrant, offers a suburban atmosphere characterized by established residential neighborhoods and convenient commercial corridors. The area is largely defined by its proximity to major regional employers, with Kaiser Permanente’s Modesto Medical Center serving as a critical anchor for local employment and stability. This part of the city is known for a blend of older, mid-century housing stock and newer developments, providing a practical environment for families seeking access to medical services and local retail without the intensity of the downtown core.
Financial metrics in this ZIP reveal a challenging gap for voucher program participants. The HUD FY2026 Fair Market Rent (FMR) for a 2-bedroom unit is set at $1,930, which trails the current market rent of $2,139 by $209 per month. Investors looking at entry-level assets will note a median 2BR sale price of $392,133, while the broader area shows a median home value of $491,894. With properties moving in just 25 days, demand is clearly high, but the disparity between the subsidy ceiling and market rates suggests a potential cash-flow shortfall for landlords relying solely on the standard FMR.
The tenant profile here is shaped by a 37.7% renter share and a solid median household income of $86,849, indicating a population that can generally support market rates. Families are often drawn to the area for its access to highly-rated schools within the Sylvan Union School District, which adds a layer of stability to the rental pool. While transit options exist, the neighborhood character is predominantly car-dependent, yet the presence of top-tier amenities and medical infrastructure sustains consistent demand from working professionals and healthcare employees.
The Section 8 verdict for 95355 leans heavily toward an appreciation play rather than immediate cash-flow optimization. The rapid 25-day turnover on the sales side and significant median home values point to a market where equity growth outpaces rental yields. Because the FMR lags behind the Zillow market rent by $209, landlords accepting vouchers must treat the subsidy as a stabilization tool rather than a premium rent maximizer, focusing on the long-term asset value growth that this stable, income-qualified neighborhood provides.
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.