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 | $1,790 |
| 1 Bedroom | $1,840 |
| 2 Bedrooms | $2,260 |
| 3 Bedrooms | $2,960 |
| 4 Bedrooms | $3,420 |
| 5 Bedrooms | $3,967 |
| 6 Bedrooms | $4,443 |
| 7 Bedrooms | $4,798 |
| 8 Bedrooms | $5,038 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,960 | $770,488 | 0.38% | F |
| 4BR | $3,420 | $915,497 | 0.37% | F |
U.S. Census Bureau data (2024)
Sacramento--Roseville--Arden-Arcade, CA HUD Metro FMR Area, specifically ZIP 95638, offers a unique opportunity for landlords and small-portfolio investors looking to strategically position their investments. This ZIP code is best suited as a cash-flow anchor within a Section 8 portfolio strategy.
The primary reason for this classification is the significant spread between the Fair Market Rent (FMR) and the market rent. For fiscal year 2024, the FMR for ZIP 95638 is set at $2080, whereas the market rent stands at $1670. This $410 difference represents a substantial cushion for landlords, ensuring they can rely on consistent rental income that exceeds the local market average. This positive spread means that even if there are fluctuations in the broader housing market, landlords can maintain steady cash flows due to the guaranteed higher rents through Section 8 vouchers.
Moreover, the median home value in ZIP 95638 is $799,703, indicating a relatively stable and high-value residential area. While appreciation plays often require a lower price-cut share and shorter days on market (DOM), these metrics are not applicable here, making it less suitable for an appreciation-focused investment strategy. Instead, the focus should be on leveraging the higher FMRs to secure reliable cash flow.
The ZIP code also has a 14.5% renter share, suggesting a moderate demand for rental properties. Coupled with a median income of $91,500, this indicates a healthy economic base capable of supporting higher rents without straining tenants. The higher FMR ensures that the properties remain attractive to both tenants and investors alike, creating a balanced ecosystem where the financial stability of the renters is reflected in their ability to pay higher rents through Section 8 programs.
In conclusion, ZIP 95638 serves as a solid cash-flow anchor within a Section 8 portfolio strategy, thanks to the favorable spread between the FMR and market rent. Landlords and small-portfolio investors can confidently invest in this area, knowing that their properties will generate stable and predictable returns, regardless of short-term market volatility.
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.