Section 8 Fair Market Rent (FMR) for ZIP 95621 - 2027

Investment Score for ZIP 95621

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	$1,750
1 Bedroom	$1,800
2 Bedrooms	$2,210
3 Bedrooms	$2,900
4 Bedrooms	$3,340
5 Bedrooms	$3,874
6 Bedrooms	$4,339
7 Bedrooms	$4,686
8 Bedrooms	$4,920

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$2,210	$274,281	0.81%	C
3BR	$2,900	$440,667	0.66%	D
4BR	$3,340	$493,293	0.68%	D
5BR	$3,874	$564,080	0.69%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95621 (Citrus Heights, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95621, as determined by HUD for 2026, is $2180 for a two-bedroom unit. This amount represents 32.3% of the median household income in Citrus Heights, which stands at $80,901. However, the actual rental market in Citrus Heights is significantly higher. The Zillow median price for a two-bedroom unit is $283,137, which translates to a price-to-FMR ratio of 10.8x. This means that landlords would need to charge approximately $2831 per month to cover the mortgage on a property valued at the Zillow median price. Given the disparity between FMR and actual rents, Section 8 voucher holders face significant constraints. They can only afford units priced at or below the FMR, which is far lower than what most landlords would require to break even on their mortgage payments. Consequently, voucher holders have limited options and must often settle for older or less desirable properties that fall within their budget. #### Affordability & Renter Profile Citrus Heights has a population of 42,442, with 31.9% of residents being renters. This indicates a substantial rental market, but it also suggests that the area is not overwhelmingly dominated by renters. The occupancy rate of 96.6% implies that the housing stock is nearly fully occupied, indicating a tight market where demand is close to supply. Given the high price-to-FMR ratio, affordability is a significant concern for renters. The median household income of $80,901 is relatively moderate compared to the cost of living in Citrus Heights, especially when considering that a two-bedroom unit's rent would be $2180 under the FMR guidelines. In reality, however, the average rent is likely much higher, putting considerable financial strain on many residents. The typical renter in Citrus Heights is likely to be middle-class families who might struggle to find affordable housing. With the FMR representing only a third of the median income, it’s clear that the majority of residents must allocate a larger portion of their earnings towards housing costs. This tight market condition could lead to increased competition among renters, driving up rental prices further. #### Investor Angle From an investor perspective, focusing on the FMR for two-bedroom units ($2180) would likely result in negative cash flow, given the high mortgage payments required to own a property at the Zillow median price. To illustrate, if a landlord were to purchase a two-bedroom property at the Zillow median price of $283,137, they would need to charge around $2831 per month to cover the mortgage alone, assuming a 4.5% interest rate and a 30-year fixed mortgage. This discrepancy between FMR and actual rents means that investors relying solely on Section 8 vouchers would face challenges in achieving positive cash flow. The investment grade for this ZIP code would be considered low due to the high cost of acquiring properties relative to the allowable rent under the FMR. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider smaller units such as one-bedroom apartments. The FMR for a one-bedroom unit is $1770, which is still significantly lower than the Zillow median price but might offer better opportunities for positive cash flow. Landlords could potentially find more affordable properties in this category that align better with the FMR. 2. **Consider Older Properties**: Investors looking to enter the Section 8 market in Citrus Heights should focus on older or less desirable properties that are more likely to be priced closer to the FMR. These units may not command the highest rents but could provide a more sustainable investment strategy when paired with Section 8 vouchers. 3. **Diversify Rental Sources**: To mitigate the risk of negative cash flow, investors should diversify their rental sources. While some units can be rented through Section 8, others could be rented to non-voucher tenants willing to pay market rates. This mixed approach would help balance the overall financial performance of the portfolio. #### Bottom Line For investors focused specifically on Section 8 vouchers, the recommendation for ZIP code 95621 would be to **skip** this market. The high price-to-FMR ratio and tight rental market make it challenging to achieve positive cash flow while adhering to the FMR guidelines. Instead, investors should look for areas with a more favorable price-to-FMR ratio or consider other investment strategies that do not rely exclusively on Section 8 vouchers.

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.