Location: Sacramento--Roseville--Arden-Arcade, 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 | $2,480 |
| 1 Bedroom | $2,560 |
| 2 Bedrooms | $3,140 |
| 3 Bedrooms | $4,120 |
| 4 Bedrooms | $4,750 |
| 5 Bedrooms | $5,510 |
| 6 Bedrooms | $6,171 |
| 7 Bedrooms | $6,665 |
| 8 Bedrooms | $6,998 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $3,140 | $448,980 | 0.7% | D |
| 3BR | $4,120 | $513,085 | 0.8% | C |
| 4BR | $4,750 | $641,182 | 0.74% | D |
U.S. Census Bureau data (2024)
The Section 8 thesis in ZIP 95614 is anchored by the disparity between the Fair Market Rent (FMR) set by HUD for fiscal year 2024, which is $3,110, and the actual market rent, which is $1,300 according to recent data from Zillow. This represents a significant gap of $1,810 or approximately 58%.
In Cool, CA, where 5.5% of residents are renters and the median home value stands at $526,786 with a median income of $133,426, landlords must consider the implications of this gap. When the FMR exceeds the market rent, as it does here, the attractiveness of voucher tenants increases. These tenants can provide a steady and reliable income stream, ensuring that the property generates consistent cash flow despite the lower market rates.
However, accepting housing vouchers below the open-market rate comes with its own set of challenges. Landlords need to balance the benefits of guaranteed rent against potential drawbacks such as stricter maintenance standards and slower response times to repairs and other issues. Additionally, the difference between the FMR and the actual market rent means landlords will be subsidizing the cost of housing, which can affect overall yields and profitability.
Given the context of Cool, CA, with its relatively high median home value and income levels, landlords and small-portfolio investors should carefully evaluate whether the stability offered by voucher tenants justifies the financial gap. This analysis is crucial for optimizing investment strategies in the current rental climate.
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.