Section 8 Fair Market Rent (FMR) for ZIP 95838 - 2027

Investment Score for ZIP 95838

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	$313,165	0.65%	D
3BR	$2,690	$397,458	0.68%	D
4BR	$3,100	$454,267	0.68%	D
5BR	$3,596	$503,855	0.71%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 95838 (Sacramento, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 95838, as set by HUD for 2026, is $2080 for a two-bedroom unit. This amount represents 36.5% of the median household income of $68,349, indicating that it is a reasonable rent level for the area. However, the actual rental market in this ZIP code is significantly higher than the FMR. The Zillow median price for a two-bedroom rental property is $318,588, which translates to a monthly rent of approximately $1327 per month based on a typical mortgage payment. Given the high price-to-FMR ratio of 12.8x, it is clear that actual rents far exceed the FMR, creating significant constraints for voucher holders. For instance, a voucher holder would struggle to find a two-bedroom unit within the $2080 limit, as the average rent is likely much higher. #### Affordability & Renter Profile ZIP code 95838 has a population of 40,677, with 43.8% being renters. The occupancy rate stands at 97.6%, suggesting a very tight rental market with limited available units. The median household income of $68,349 means that many residents are middle-class families who might find it challenging to afford housing without assistance. The high rent-to-income ratio indicates that the market is quite competitive, with few units affordable to low- and moderate-income households. Given these factors, the demand for affordable housing is strong, but supply is constrained, making it a challenging environment for renters without financial aid. #### Investor Angle From an investor perspective, the ZIP code 95838 presents a mixed picture. While the high occupancy rate suggests strong demand, the actual rents are well above the FMR, which could make it difficult to attract tenants relying solely on Section 8 vouchers. To determine if this ZIP is cash-flow positive at FMR, we need to consider the typical rental rates and the potential for vacancy. With the FMR for a two-bedroom unit at $2080, and the actual market rent likely closer to the Zillow median, an investor would have to accept a significant discount to participate in the Section 8 program. Given the high price-to-FMR ratio, the investment grade for properties in this ZIP code would be considered lower for Section 8-focused investors. The primary challenge is finding tenants willing to pay the higher market rates, while still maintaining a manageable vacancy rate. Investors should also consider the administrative burden and potential delays associated with the Section 8 program, which can affect cash flow. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom apartments, where the FMR is $1690. This aligns more closely with the actual rental market, increasing the likelihood of attracting tenants and maintaining cash flow. Additionally, there may be fewer competition issues compared to larger units. 2. **Consider Mixed-Income Developments**: Since the rental market is tight and rents are high, developing properties that cater to both Section 8 voucher holders and market-rate tenants could be a viable strategy. This approach allows investors to leverage the higher market rents while still providing affordable options for those with vouchers. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help streamline the process of securing Section 8 tenants. These authorities often have waiting lists and can provide guidance on how to navigate the complexities of the program, potentially reducing vacancy periods. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 95838 is to **Skip**. The high price-to-FMR ratio and tight rental market make it challenging to achieve positive cash flow while adhering to the FMR guidelines. Investors looking to participate in the Section 8 program would be better served by exploring areas with a more favorable price-to-FMR ratio and less competitive rental markets. However, for those willing to engage in mixed-income developments or smaller units, there may be opportunities to balance affordability with market rates.

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.