Section 8 Fair Market Rent (FMR) for ZIP 95407 - 2027

Investment Score for ZIP 95407

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	$1,820
1 Bedroom	$1,980
2 Bedrooms	$2,590
3 Bedrooms	$3,590
4 Bedrooms	$3,950
5 Bedrooms	$4,582
6 Bedrooms	$5,132
7 Bedrooms	$5,543
8 Bedrooms	$5,820

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	$1,980	$507,120	0.39%	F
2BR	$2,590	$533,535	0.49%	F
3BR	$3,590	$628,036	0.57%	F
4BR	$3,950	$728,265	0.54%	F
5BR	$4,582	$815,206	0.56%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95407 (Santa Rosa, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95407, as per the 2026 estimates, is set at $2550 for a two-bedroom unit. This amount represents 36.9% of the median household income of $82,863, indicating that it is a reasonable rent for low-income families who qualify for Section 8 vouchers. However, the actual rental market in Santa Rosa presents a different picture. The Zillow median price for a two-bedroom unit is $529,841, which translates into a monthly rent of approximately $2,124 based on a typical 2.5% cap rate. This means that the actual rents in the market are significantly higher than the FMR, creating a constraint for voucher holders. They would struggle to find units within their budget, as landlords might be reluctant to accept vouchers due to the higher potential rental income they can earn by renting outside the program. #### Affordability & Renter Profile ZIP code 95407 has a population of 42,036, with 47.6% of residents being renters. The occupancy rate stands at 97.6%, suggesting that the housing market is quite tight. Given that the median household income is $82,863, and the FMR for a two-bedroom unit is $2550, which is only 36.9% of the median income, it indicates that there is a significant portion of the population that could potentially benefit from affordable housing options. However, the high Zillow median price and the resulting high rent-to-price ratio of 17.3x suggest that the market is not particularly affordable for most renters. This tight market condition implies that there is strong demand for rental properties, but the supply is limited, leading to higher rents and making it challenging for low-income households to find suitable accommodation. #### Investor Angle From an investor perspective, the ZIP code 95407 appears to be a challenging market for cash flow when relying solely on FMR. The FMR for a two-bedroom unit is $2550, while the actual market rent is estimated to be around $2,124 based on the Zillow median price. However, given the high Zillow median price, the actual market rent is likely to be even higher, possibly closer to $2,500 or more. This means that investors focusing on Section 8 vouchers would need to carefully consider the financial implications. The investment grade would be relatively low due to the disparity between FMR and market rents, and the potential for lower occupancy rates if landlords prefer higher-paying tenants over those using vouchers. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom or studio apartments. The FMR for a one-bedroom unit is $1940, which is still a significant discount compared to the market rent. This strategy can help maximize cash flow and reduce the risk of vacancy. 2. **Consider Renovation Projects**: Investors looking to acquire properties at a discount and renovate them to command higher rents can explore opportunities in ZIP code 95407. By purchasing older homes or apartments and upgrading them, investors can position these units to attract both voucher holders and market-rate tenants, thereby increasing the likelihood of occupancy and higher returns. #### Bottom Line For Section 8-focused investors, the ZIP code 95407 presents a mixed picture. While there is a significant demand for rental properties, the high market rents and the tightness of the market make it challenging to achieve positive cash flow solely through FMR. Therefore, the recommendation is to **Skip** this ZIP code for pure Section 8 investments. Instead, investors should consider a diversified approach where they can leverage both voucher and market-rate tenants, or focus on smaller units where the gap between FMR and market rents is less pronounced. In summary, the high Zillow median price and the resulting high rent-to-price ratio indicate that the market is not particularly favorable for Section 8 investments without additional strategies to enhance cash flow and occupancy rates.

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.