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 | $1,380 |
| 1 Bedroom | $1,430 |
| 2 Bedrooms | $1,750 |
| 3 Bedrooms | $2,300 |
| 4 Bedrooms | $2,650 |
| 5 Bedrooms | $3,074 |
| 6 Bedrooms | $3,443 |
| 7 Bedrooms | $3,718 |
| 8 Bedrooms | $3,904 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,750 | $320,352 | 0.55% | F |
| 3BR | $2,300 | $365,906 | 0.63% | D |
| 4BR | $2,650 | $423,277 | 0.63% | D |
| 5BR | $3,074 | $510,783 | 0.6% | D |
U.S. Census Bureau data (2024)
In evaluating ZIP 95824, located in Sacramento, CA, for potential investment opportunities, several key concerns arise that must be addressed with the available data.
Objection 1: Will Fair Market Rent (FMR) of $1,610 for fiscal year 2024 cover the mortgage on a $368,895 home?
The FMR of $1,610 does not directly indicate the mortgage coverage but can provide insights into rental income potential. To determine if it covers the mortgage, one must consider the mortgage rate and term. Assuming a typical 30-year fixed-rate mortgage at a current average rate of around 6%, the monthly payment on a $368,895 home would be approximately $2,160. This amount exceeds the FMR, suggesting that relying solely on FMR might not fully cover the mortgage payments. However, investors should also factor in the possibility of renting above the FMR, which could offset the gap.
Objection 2: Is there enough renter demand at 55.5%?
A 55.5% rental vacancy rate in ZIP 95824 is relatively high compared to national averages, which typically hover around 7%. A higher vacancy rate implies less demand, potentially leading to challenges in maintaining consistent occupancy. However, this figure alone does not provide a complete picture. It's important to note that ZIP 95824 is part of a larger metropolitan area where overall demand might still be robust. Investors should look into trends over time and compare this rate to surrounding areas to gauge the true level of demand. Additionally, the median household income and employment rates in the area can offer further context on the sustainability of rental demand.
Objection 3: Will vouchers keep pace with $1,671 market rents?
The voucher program aims to ensure affordable housing, but whether it will keep pace with market rents depends on the specifics of the program. The Housing Choice Voucher (Section 8) program adjusts its payment standards based on local market conditions. In ZIP 95824, the current market rent is $1,671, and the FMR is slightly lower at $1,610. While the voucher program is designed to cover the majority of rent costs, it often pays a portion up to a certain limit. If the voucher amount is below $1,671, landlords may need to subsidize the difference. To fully assess this, one would need to review the latest voucher payment standard for the area, which can be found through the local Public Housing Authority.
Investors must carefully consider these factors when deciding whether ZIP 95824 is a viable investment opportunity. While the data provides some answers, additional research into local economic conditions and housing trends is essential for making informed decisions.
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.