Section 8 Fair Market Rent (FMR) for ZIP 95712 - 2027

FY 2027 Fair Market Rent Rates

The analysis of the Section 8 cap rate for ZIP code 95712 reveals some critical insights into investment potential. With an annualized Fair Market Rent (FMR) for a two-bedroom apartment set at $1,810 for fiscal year 2026, we can begin to outline the financial landscape.

First, let's consider the scenario where the median home value is known. However, since the median home value for ZIP 95712 is not available, we must rely on other indicators such as the implied gross yield. The gross yield can be calculated by taking the annual rent and dividing it by the property value. In this case, if we had a median home value, the calculation would provide a direct comparison to market rents.

Second, the market rent for the area is also not specified, making it challenging to compare directly against the FMR. Without this figure, we cannot calculate the exact gross yield for market rents. However, the FMR of $1,810 per month suggests a baseline for rental income that landlords can expect from tenants participating in the Section 8 program.

The implied gross yield based on the FMR alone indicates a conservative estimate of potential returns. This yield would be lower compared to typical market yields due to the fixed nature of government rental assistance payments. For instance, if the median home value were hypothetically $300,000, the implied gross yield would be 7.24%. This figure is derived from $1,810 multiplied by 12 months, divided by $300,000. But without a specific median home value, this remains speculative.

Given the lack of specific data points such as median home value and precise market rent, it is difficult to state definitively which scenario is more realistic. However, the known FMR provides a stable income stream, which is beneficial for long-term investments. The unknown market rent introduces variability and could potentially offer higher yields, depending on local demand and vacancy rates.

The absence of specific renter density and Days on Market (DOM) figures complicates the analysis further. These metrics are crucial for understanding the local rental market dynamics. Nonetheless, the FMR serves as a reliable benchmark for landlords considering Section 8 participation.

In conclusion, while the exact cap rate cannot be determined without complete data, the FMR of $1,810 per month offers a solid foundation for estimating potential returns in ZIP 95712. Investors should consider this figure alongside local market conditions and their own financial projections to make informed decisions.

Data Sources: FMR data from HUD (2027).

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.