Section 8 Fair Market Rent (FMR) for ZIP 95628 - 2027

Investment Score for ZIP 95628

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	$1,910
1 Bedroom	$1,970
2 Bedrooms	$2,420
3 Bedrooms	$3,170
4 Bedrooms	$3,660
5 Bedrooms	$4,246
6 Bedrooms	$4,756
7 Bedrooms	$5,136
8 Bedrooms	$5,393

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
1BR	$1,970	$244,908	0.8%	C
2BR	$2,420	$410,123	0.59%	F
3BR	$3,170	$553,036	0.57%	F
4BR	$3,660	$733,179	0.5%	F
5BR	$4,246	$860,694	0.49%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95628 (Fair Oaks, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95628, as set by HUD for 2026, is $2480 for a two-bedroom unit. This figure represents 25.7% of the median household income of $115,803, indicating that it is reasonably aligned with the local economic conditions. However, the actual rental market price for a two-bedroom unit, based on Zillow's median, is $412,674, which is significantly higher than the FMR. The price-to-FMR ratio of 13.9x suggests that there is a substantial gap between the FMR and the actual rental prices in the area. For Section 8 voucher holders, this means that finding a suitable rental property can be challenging due to the limited number of units available at or below the FMR. Additionally, landlords might be hesitant to accept vouchers given the disparity between the FMR and market rates, leading to potential constraints for voucher holders in securing housing. #### Affordability & Renter Profile ZIP code 95628 has a population of 44,855, with 28.4% being renters. The occupancy rate stands at 96.8%, indicating a robust demand for rental properties. Given the high median household income of $115,803, the area is likely attractive to higher-income individuals who can afford the premium rental prices. However, the FMR for a two-bedroom unit is only $2480, which is far below the market rate of $412,674. This suggests that the rental market is quite tight and not particularly affordable for lower-income households, especially those relying on Section 8 vouchers. The high occupancy rate further supports the notion that the market is competitive, with limited options for those seeking affordable rentals. #### Investor Angle From an investor perspective, the ZIP code 95628 presents a mixed picture. While the FMR for a two-bedroom unit is $2480, the actual market rate is $412,674, which is 13.9 times higher. This implies that if an investor were to purchase a property at the median price, they would need to generate significant cash flow through other means, such as appreciation or short-term rentals, rather than relying solely on the FMR. In terms of cash flow, renting out a property at the FMR would not cover the mortgage payments or other expenses associated with owning a property valued at $412,674. Therefore, the investment grade for this ZIP code, specifically for Section 8-focused investors, is low. The high price-to-FMR ratio makes it difficult for investors to achieve positive cash flow when adhering strictly to the FMR guidelines. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider focusing on smaller units, such as one-bedroom or studio apartments, where the FMR is lower ($2020 for 1BR). These units may offer better opportunities for positive cash flow when rented at or near the FMR. 2. **Consider Alternative Rental Markets**: Investors interested in Section 8 vouchers should look into alternative markets where the price-to-FMR ratio is closer to 1. This would allow for easier cash flow management and a higher likelihood of acceptance by voucher holders. ZIP 95628’s ratio of 13.9x is exceptionally high, making it less favorable for traditional Section 8 investments. 3. **Evaluate Long-Term Appreciation Potential**: If investing in ZIP 95628, focus on the long-term appreciation potential of properties rather than short-term rental income. Given the high median household income and strong demand, there is a possibility that property values will continue to rise, providing a solid return on investment over time. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 95628 is to **skip** this market. The extremely high price-to-FMR ratio makes it challenging to find properties that can generate positive cash flow while adhering to the FMR guidelines. Instead, investors should look for areas with a more favorable ratio and a larger pool of affordable rental properties.

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.