Location: Stockton-Lodi, CA | Metro: Oakland-Fremont, CA HUD Metro FMR Area
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 | $2,290 |
| 1 Bedroom | $2,440 |
| 2 Bedrooms | $3,020 |
| 3 Bedrooms | $4,180 |
| 4 Bedrooms | $5,050 |
| 5 Bedrooms | $5,858 |
| 6 Bedrooms | $6,561 |
| 7 Bedrooms | $7,086 |
| 8 Bedrooms | $7,440 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $3,020 | $509,182 | 0.59% | F |
| 3BR | $4,180 | $725,361 | 0.58% | F |
| 4BR | $5,050 | $907,019 | 0.56% | F |
| 5BR | $5,858 | $1,065,859 | 0.55% | F |
U.S. Census Bureau data (2024)
To determine if you should buy in ZIP code 95391 (Tracy, CA) for Section 8 investments, follow this decision tree based on the provided data:
Step 1: Calculate if the Fair Market Rent (FMR) of $2,420 can cover the debt service on a property valued at $927,567.
Yes: The FMR of $2,420 clears the debt service. This means that the rental income is sufficient to meet the mortgage payments and other costs associated with owning the property. Proceed to Step 2.
No: The FMR of $2,420 does not cover the debt service on a property worth $927,567. Do not invest in this area for Section 8 purposes as the rental income would be insufficient to sustain ownership costs.
It Depends: Further analysis is required to understand the exact debt service amount. However, given the typical mortgage rates and terms, an FMR of $2,420 is unlikely to cover the debt service on such a high-value property.
Step 2: Compare the Zillow Observed Rental Index (ZORI) of $3,021 against the FMR of $2,420.
ZORI is above FMR: The ZORI of $3,021 exceeds the FMR of $2,420. This suggests that market rents are higher than what Section 8 allows, making it less attractive for Section 8 tenants. Consider investing in areas where ZORI is closer to or below the FMR.
ZORI is at or below FMR: If the ZORI were equal to or lower than the FMR, it would be more favorable for Section 8 tenants as the rent would be within their budget. Since the ZORI is above the FMR, this branch does not apply.
Step 3: Assess the demand by looking at the percentage of renters (30.0%) and the days on market (DOM) which is listed as N/A.
Yes: With 30.0% of the population renting, there is a reasonable level of demand. However, since the DOM is not available, it's difficult to gauge how quickly properties are rented out. If you can secure additional data indicating a low DOM, proceed with caution but consider the investment.
No: If the DOM was available and indicated a long time before properties are rented, then the answer would be no due to insufficient demand. Since the DOM is N/A, this branch does not apply.
It Depends: The lack of DOM data makes it challenging to fully assess demand. The 30.0% rental rate is acceptable, but without knowing the DOM, you cannot make a definitive decision. Investigate further to find out the average DOM for rentals in Tracy, CA.
In summary, the FMR of $2,420 is unlikely to cover the debt service on a $927,567 property, making ZIP 95391 unsuitable for Section 8 investments. Additionally, the ZORI being higher than the FMR indicates that market rents exceed Section 8 limits, reducing the pool of potential tenants. Lastly, while 30.0% of residents are renters, the absence of DOM data complicates the evaluation of demand. To conclude, do not purchase in ZIP 95391 for Section 8 unless you can confirm the debt service is covered and have a better understanding of the rental market dynamics.
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.