Section 8 Fair Market Rent (FMR) for ZIP 95670 - 2027

Investment Score for ZIP 95670

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	$1,720
1 Bedroom	$1,770
2 Bedrooms	$2,170
3 Bedrooms	$2,850
4 Bedrooms	$3,280
5 Bedrooms	$3,805
6 Bedrooms	$4,262
7 Bedrooms	$4,603
8 Bedrooms	$4,833

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	$2,170	$371,189	0.58%	F
3BR	$2,850	$457,713	0.62%	D
4BR	$3,280	$571,511	0.57%	F
5BR	$3,805	$678,545	0.56%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95670 (Rancho Cordova, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95670 is set by HUD for the year 2026. The FMRs are as follows: - 0BR: $1670 - 1BR: $1760 - 2BR: $2160 (which represents 29.0% of the median household income) - 3BR: $2880 - 4BR: $3310 These figures represent the maximum amount that a Section 8 voucher holder can pay towards rent. However, the actual rental market in Rancho Cordova is significantly higher. For instance, the Zillow median price for a 2BR property is $373,971, which translates to a monthly mortgage payment of approximately $1,600 assuming a 30-year fixed-rate mortgage at 5%. This means that landlords would need to charge around $1,600 just to cover their mortgage payments, not including other costs such as maintenance, insurance, and taxes. Given the high actual rental rates compared to FMRs, there are significant constraints for voucher holders. They may struggle to find properties that accept Section 8 vouchers due to the disparity between what they can pay and what landlords need to cover their expenses. Additionally, the price-to-FMR ratio for a 2BR unit is 14.4x, indicating that the actual market rent is far above the FMR, making it difficult for voucher holders to secure housing without substantial landlord subsidies. #### Affordability & Renter Profile Rancho Cordova has a population of 58,819, with 44.5% of residents being renters. The occupancy rate stands at 95.8%, suggesting a robust demand for rental units. The median household income is $89,484, which places many residents in a middle-income bracket. However, the FMR for a 2BR unit ($2160) is only 29.0% of the median income, indicating that the rental market is relatively affordable for most residents but not for those relying solely on Section 8 vouchers. This tight rental market makes it challenging for low-income households to find suitable housing. The high occupancy rate and the significant gap between FMR and actual market rents suggest that the area is undersupplied with affordable rental units. Consequently, many voucher holders might have to look outside the ZIP code for more affordable options, or landlords who accept vouchers may have to offer below-market rents to attract tenants. #### Investor Angle From an investor perspective, the ZIP code 95670 presents a mixed picture. The Zillow median price for a 2BR property is $373,971, which implies a high initial investment cost. However, the rental market is strong, with a high occupancy rate and a significant portion of the population renting. To determine if the ZIP code is cash-flow positive at FMR, we need to consider the total rental income versus the total costs. Assuming a 2BR unit at the FMR of $2160, the annual rental income would be $25,920. If we take into account the Zillow median price and a typical mortgage payment of $1,600 per month, the annual mortgage payment would be $19,200. Adding other costs such as property taxes, insurance, and maintenance, let’s assume these additional costs total $6,000 annually. Therefore, the total annual costs would be $25,200. This means that the annual rental income ($25,920) slightly exceeds the total annual costs ($25,200), resulting in a positive cash flow of $720 per year. However, this positive cash flow is marginal and could be affected by any increase in costs or decrease in rental income. Given the high price-to-FMR ratio, the investment grade for Section 8-focused investors would be considered low to moderate, as the returns are minimal and the risk of vacancy is higher due to the limited pool of eligible tenants. #### Specific Actionable Insights 1. **Target Larger Units**: Focus on larger units like 3BR and 4BR properties, where the FMR is higher and closer to the actual market rents. For example, a 3BR unit at $2880 FMR is more likely to generate a positive cash flow when considering the Zillow median price and associated costs. 2. **Consider Subsidies**: Explore potential government subsidies or partnerships that can help offset the difference between FMR and actual market rents. This could include state or local programs designed to support affordable housing. 3. **Rent Stabilization Policies**: Be aware of any local rent stabilization policies that might affect your ability to raise rents over time. These policies could impact long-term profitability and cash flow. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 95670 is to **Skip** this market. While there is a slight positive cash flow for 2BR units, the overall investment grade is low due to the high price-to-FMR ratio and the limited number of eligible tenants. Instead, investors should consider areas with lower ratios and a larger pool of voucher holders to ensure better returns and stability.

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.