Location: Nevada County, CA | Metro: Sacramento--Roseville--Arden-Arcade, 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 | $1,580 |
| 1 Bedroom | $1,660 |
| 2 Bedrooms | $2,070 |
| 3 Bedrooms | $2,770 |
| 4 Bedrooms | $3,240 |
| 5 Bedrooms | $3,758 |
| 6 Bedrooms | $4,209 |
| 7 Bedrooms | $4,546 |
| 8 Bedrooms | $4,773 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,070 | $298,820 | 0.69% | D |
| 3BR | $2,770 | $637,664 | 0.43% | F |
| 4BR | $3,240 | $898,167 | 0.36% | F |
| 5BR | $3,758 | $1,054,408 | 0.36% | F |
U.S. Census Bureau data (2024)
In ZIP code 95602, which covers Auburn, California, in Placer County, understanding the economics of Section 8 housing is crucial for landlords and small-portfolio investors. The SAFMR (Section 8 Area Fair Market Rent) for a two-bedroom apartment in this ZIP code for fiscal year 2024 is set at $1980. This SAFMR is specifically tailored for this ZIP code, ensuring it reflects the local rental market conditions accurately.
The local market rent for a two-bedroom unit, as measured by ZORI (Zillow Observed Rent Index), stands at $2,075. This figure represents the average rent price for similar units in the area, providing a benchmark against which the SAFMR can be compared.
A Section 8 voucher is designed to cover the difference between the tenant's portion of the rent and the total rent. The tenant's portion is typically 30% of their adjusted income. For instance, if a tenant has an adjusted income of $1,500 per month, they would pay 30% of that, which is $450. The remaining balance, up to the SAFMR, is covered by the voucher program. In ZIP 95602, this means the voucher would cover up to $1,530 for a two-bedroom unit at the SAFMR rate.
Utility allowances are also factored into the equation. These allowances vary but generally provide additional funds to cover the cost of utilities. For a two-bedroom apartment, the utility allowance might be around $200 to $300 per month, depending on the specifics of the voucher and the local utility costs.
To walk a landlord through the actual payment process, consider the following example. If a tenant with an adjusted income of $1,500 per month rents a two-bedroom unit for $1,980 (the SAFMR), they will pay $450, and the voucher program will cover the remaining $1,530. If the utility allowance is $250, this amount is paid directly to the landlord as part of the voucher reimbursement. Thus, the landlord receives a total of $1,780 per month from the voucher program and the tenant.
Given the local market rent of $2,075, there is a $295 shortfall when comparing the total reimbursement from the voucher program ($1,780) to the ZORI. This means landlords may need to adjust their expectations or find ways to reduce their costs to accommodate this gap. Alternatively, landlords could seek to fill vacancies with tenants who do not require vouchers, thereby potentially achieving higher rental income levels closer to the ZORI.
Landlords must understand that while Section 8 vouchers provide a steady stream of income, it comes with a fixed rate that does not necessarily align with the local market rent. In ZIP 95602, landlords should anticipate a reimbursement gap for two-bedroom units, which can impact their overall financial planning and investment strategy.
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.