Section 8 Fair Market Rent (FMR) for ZIP 95397 - 2027
Location: Modesto, CA | Metro: Modesto, CA MSA
FY 2027 Fair Market Rent Rates
| Unit Size |
Monthly FMR |
| Studio | $1,270 |
| 1 Bedroom | $1,380 |
| 2 Bedrooms | $1,800 |
| 3 Bedrooms | $2,410 |
| 4 Bedrooms | $2,820 |
| 5 Bedrooms | $3,271 |
| 6 Bedrooms | $3,664 |
| 7 Bedrooms | $3,957 |
| 8 Bedrooms | $4,155 |
To determine if a landlord should buy in ZIP 95397 for Section 8 purposes, follow these steps:
- Step 1: Can the Fair Market Rent (FMR) of $1530 cover your debt service?
- Yes: If the FMR can cover your debt service, proceed to the next step.
- No: Do not invest in this ZIP code unless you can find properties that are affordable under the FMR.
- Step 2: How does the market rent compare to the FMR?
- Above FMR: The market rent is higher than the FMR, which means that Section 8 tenants might struggle to afford the market rate. This could lead to lower occupancy rates for Section 8 units.
- At FMR: The market rent aligns with the FMR, making it feasible to attract both market-rate and Section 8 tenants.
- Below FMR: The market rent is lower than the FMR, indicating that landlords can potentially set rents at the FMR level without deterring tenants. This scenario is favorable for Section 8 investments.
- Step 3: Is there sufficient demand in the rental market?
- N/A% of renters + N/A-day Days on Market (DOM): Without specific data on the percentage of renters and the DOM, it's challenging to assess the demand accurately. However, generally speaking, a higher percentage of renters and a shorter DOM indicate strong demand, while the opposite suggests weaker demand.
The final decision will depend on the answers to these questions. If the FMR covers your debt service, the market rent is below or at the FMR, and there is strong demand indicated by a high percentage of renters and a short DOM, then investing in ZIP 95397 for Section 8 purposes is advisable. Conversely, if any of these conditions are not met, consider other ZIP codes with better alignment to your investment criteria.
Data Sources: FMR data from HUD (2027).
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.