Section 8 Fair Market Rent (FMR) for ZIP 95831 - 2027

Investment Score for ZIP 95831

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	$1,950
1 Bedroom	$2,000
2 Bedrooms	$2,460
3 Bedrooms	$3,230
4 Bedrooms	$3,720
5 Bedrooms	$4,315
6 Bedrooms	$4,833
7 Bedrooms	$5,220
8 Bedrooms	$5,481

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	$2,460	$454,201	0.54%	F
3BR	$3,230	$590,783	0.55%	F
4BR	$3,720	$716,549	0.52%	F
5BR	$4,315	$871,600	0.5%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95831 (Sacramento, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95831 in Sacramento, CA, is set by HUD for the year 2026. The FMRs for various unit sizes are as follows: - 0BR: $1980 - 1BR: $2070 - 2BR: $2550 (which is 30.4% of the median household income) - 3BR: $3390 - 4BR: $3910 These FMRs represent the maximum rent that a Section 8 voucher holder can pay. However, the actual rental market in ZIP 95831 is significantly higher. For instance, the Zillow median price for a 2BR property is $462,394, which translates into a monthly rent of approximately $1843 based on typical rental yield assumptions. This means that the actual rental rates are much higher than the FMRs, creating a significant constraint for voucher holders. They will find it challenging to secure housing that fits within their budget, especially considering that the FMR for a 2BR unit is only $2550, while the actual market rate is likely to be closer to $1843 per month plus additional costs such as utilities and maintenance. #### Affordability & Renter Profile ZIP code 95831 has a population of 43,545, with 43.3% of residents being renters. The occupancy rate stands at 95.1%, indicating a tight rental market where demand exceeds supply. Given the median household income of $100,751, the affordability of housing becomes a critical issue. The FMR for a 2BR unit represents 30.4% of the median income, which is a reasonable proportion. However, the actual rental market is far less affordable, with the Zillow median price suggesting a much higher rent. This makes it difficult for low-income families to afford housing without assistance, leading to a situation where many renters rely heavily on subsidies like Section 8 vouchers. #### Investor Angle From an investor’s perspective, the ZIP code 95831 presents a mixed picture. The FMRs are lower than the actual market rents, but they still offer a potential cash flow opportunity. Let's consider a 2BR unit as an example. At the FMR of $2550, an investor would need to ensure that the property's expenses do not exceed this amount to maintain profitability. Assuming a conservative estimate of 50% of the rent going towards expenses (including mortgage payments, property taxes, insurance, and maintenance), the net cash flow would be around $1275 per month. However, the high price-to-FMR ratio of 15.1x suggests that the purchase price of properties in this area is significantly higher than what can be recouped through FMR-based rents. This implies that the initial capital investment required to buy a property in this ZIP code would be substantial, and the return on investment (ROI) might be lower compared to other areas. Therefore, while there is potential for cash flow, the overall investment grade for Section 8-focused investors in ZIP 95831 is moderate due to the high purchase prices and limited rental upside. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as 0BR and 1BR apartments. These units have lower FMRs ($1980 and $2070 respectively) but are also likely to have lower purchase prices compared to larger units. This strategy can help maximize cash flow and ROI. 2. **Consider Property Location**: Within ZIP 95831, certain sub-areas may offer better value propositions. Investors should conduct thorough location-specific analyses to identify pockets where rental rates are closer to FMRs, thereby improving the likelihood of finding profitable opportunities. 3. **Utilize Vacant Land for Development**: With the tight rental market and high property prices, developing new rental properties on vacant land could be a viable strategy. This approach allows investors to control the construction costs and potentially offer units at prices closer to the FMR, making them more attractive to Section 8 voucher holders. #### Bottom Line For Section 8-focused investors, ZIP code 95831 presents a challenging yet potentially rewarding market. The high price-to-FMR ratio indicates that buying existing properties may not be the most efficient use of capital. Instead, investors should consider developing new properties or focusing on smaller units to optimize their returns. Based on these factors, the recommendation for this ZIP code is **Hold**. While there are opportunities, the high purchase prices and limited rental upside make it a cautious choice for those strictly focused on Section 8 investments. --- This analysis provides a detailed overview of the rental market dynamics in ZIP 95831, focusing on how Section 8 vouchers interact with the local rental environment, the profile of renters, and the investment potential for real estate investors. The actionable insights are designed to help investors navigate the complexities of this market effectively.

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.