Location: Vallejo, CA | Metro: Yolo, 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 | $1,950 |
| 1 Bedroom | $1,960 |
| 2 Bedrooms | $2,510 |
| 3 Bedrooms | $3,480 |
| 4 Bedrooms | $3,640 |
| 5 Bedrooms | $4,222 |
| 6 Bedrooms | $4,729 |
| 7 Bedrooms | $5,107 |
| 8 Bedrooms | $5,362 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,960 | $504,153 | 0.39% | F |
| 2BR | $2,510 | $562,303 | 0.45% | F |
| 3BR | $3,480 | $759,161 | 0.46% | F |
| 4BR | $3,640 | $988,061 | 0.37% | F |
| 5BR | $4,222 | $1,182,906 | 0.36% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 95616, located in Davis, California, revolves around the discrepancy between the Fair Market Rent (FMR) set by HUD and the actual market rent as indicated by Zillow's ZORI index. For fiscal year 2024, the FMR stands at $2340, while the ZORI market rent is $2623. This represents a gap of $283, or approximately 12%, indicating that landlords can expect to receive rental payments below the open-market rate when participating in the Section 8 program.
In Davis, where 64.1% of residents are renters and the median home value is $861,323, the lower median income of $74,359 suggests that many potential tenants may rely on Section 8 vouchers to afford housing. The FMR being less than the market rent means that landlords will have to accept a lower rental income per unit compared to what they could charge in the open market. However, the stability of rental income provided by the federal government can offset some of the financial risks associated with managing rental properties in a high-rent area.
Despite the gap, the Section 8 program remains attractive for landlords in Davis due to the guaranteed payment structure and reduced vacancy risk. Tenants with vouchers are typically screened for eligibility, which includes background checks and verification of income, leading to a reliable tenant pool. Additionally, the demand for affordable housing in an area with a high median home value and significant percentage of renters supports the viability of the Section 8 program as a stable investment option.
To summarize, the $283 difference between the FMR and ZORI in ZIP 95616 translates to a 12% discount on market rent. This cost of housing voucher tenants below open-market rates is a trade-off for landlords seeking stable, long-term rental income in a competitive market. The local context of Davis, with its high proportion of renters and median home values, underscores the importance of the Section 8 program in providing affordable housing options.
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.