Section 8 Fair Market Rent (FMR) for ZIP 95822 - 2027

Investment Score for ZIP 95822

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	$1,620
1 Bedroom	$1,670
2 Bedrooms	$2,050
3 Bedrooms	$2,690
4 Bedrooms	$3,100
5 Bedrooms	$3,596
6 Bedrooms	$4,028
7 Bedrooms	$4,350
8 Bedrooms	$4,568

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	$2,050	$393,555	0.52%	F
3BR	$2,690	$421,651	0.64%	D
4BR	$3,100	$483,546	0.64%	D
5BR	$3,596	$597,639	0.6%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95822 (Sacramento, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95822 in Sacramento, California, is set by HUD for 2026. The FMR for a two-bedroom apartment is $2,090, which represents 28.9% of the median household income of $86,801. However, the actual rental prices in the area significantly exceed these FMRs. According to Zillow, the median price for a two-bedroom rental property is $398,816, which translates to a price-to-FMR ratio of 15.9x. This means that actual rents are much higher than what is covered by the Section 8 vouchers. For example, a two-bedroom unit would need to be rented for $2,090 or less to be eligible under the program. Given that the average rent is likely much higher, this creates a significant constraint for voucher holders who must find properties willing to accept the lower rates. #### Affordability & Renter Profile ZIP code 95822 has a population of 46,569, with 36.8% of residents being renters. This indicates a substantial demand for rental housing. The occupancy rate of 95.9% suggests that the market is quite tight, with few vacant units available. The median household income of $86,801 implies that many residents can afford market-rate rents, but those relying on Section 8 vouchers face challenges due to the high cost of living and limited supply of affordable units. The fact that 2BR units are priced at $398,816, far above the FMR of $2,090, underscores the affordability gap in the market. This tight market makes it difficult for low-income renters to find suitable housing, especially if landlords are unwilling to accept the lower rates offered by Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 95822 presents a challenging environment for cash flow when focusing solely on Section 8 rents. The FMR for a two-bedroom unit is $2,090, which is only a fraction of the market rate. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical expenses associated with owning and managing rental properties. These include mortgage payments, property taxes, insurance, maintenance, and other operational costs. Given the high market rate of $398,816, it is unlikely that properties renting at the FMR level will generate sufficient cash flow to cover these expenses, especially considering the tight market conditions and potential competition from higher-paying tenants. The investment grade for this ZIP code is likely to be low for Section 8-focused investors. The high price-to-FMR ratio indicates that there is a significant risk of not finding enough tenants willing to pay the FMR rates, leading to potential vacancies and reduced profitability. Additionally, the high market rate suggests that landlords might prefer to rent to non-voucher tenants who can pay more, further reducing the pool of available units for Section 8 voucher holders. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should consider focusing on smaller units such as one-bedroom apartments, where the FMR is $1,700. While still below market rates, these units may have a better chance of attracting tenants who are willing to pay the FMR due to the limited supply of affordable housing. Additionally, smaller units tend to have lower operational costs, making them more feasible for cash flow at the FMR level. 2. **Consider Mixed-Income Developments**: Developing mixed-income properties could be a viable strategy. By offering a mix of units at both market rates and FMR levels, investors can ensure a steady stream of income while also providing affordable housing options. This approach can help mitigate the risks associated with relying solely on Section 8 rents. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can provide valuable insights into the demand for Section 8 units and potential opportunities for subsidies or incentives. This can help offset some of the financial risks associated with renting at FMR levels. #### Bottom Line Given the high market rates and the tight rental market in ZIP code 95822, the recommendation for Section 8-focused investors is to **Skip** this ZIP code. The significant gap between FMR and market rates, combined with the high occupancy rate, makes it challenging to achieve positive cash flow. Instead, investors should look for areas with lower price-to-FMR ratios and more flexibility in the rental market to ensure sustainable returns on their investments.

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.