Location: Chico, CA | Metro: Chico, CA MSA
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 | $1,050 |
| 1 Bedroom | $1,150 |
| 2 Bedrooms | $1,470 |
| 3 Bedrooms | $2,050 |
| 4 Bedrooms | $2,460 |
| 5 Bedrooms | $2,854 |
| 6 Bedrooms | $3,196 |
| 7 Bedrooms | $3,452 |
| 8 Bedrooms | $3,625 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,470 | $371,328 | 0.4% | F |
| 3BR | $2,050 | $571,336 | 0.36% | F |
| 4BR | $2,460 | $811,419 | 0.3% | F |
U.S. Census Bureau data (2024)
To determine if a landlord should invest in ZIP 95938 (Durham, CA) for Section 8 properties, follow this decision tree:
1) Does FMR $1720 (zip FY 2024) clear debt service on a $602,851 property?
No. The Fair Market Rent (FMR) of $1720 per month does not cover the debt service on a property valued at $602,851. Debt service includes principal and interest payments on a mortgage, property taxes, insurance, and maintenance costs. With an average annual debt service of approximately $20,000 to $25,000 for such a property, the monthly income from FMR would fall short. This makes it unviable to purchase a property of that value solely relying on Section 8 rental income.
Yes. If you're considering a property with a lower purchase price, say around $250,000 to $300,000, then the FMR of $1720 per month could potentially cover the debt service. However, this still depends on the specific terms of your financing and other fixed costs associated with the property.
2) Is market rent $1,138 (Census ACS) above, at, or below FMR?
Below FMR. The market rent of $1,138 is below the FMR of $1720. This suggests that the Section 8 program offers a higher rental rate compared to the general market, making it a better option for landlords who can secure Section 8 tenants.
3) Are 35.4% renters + N/A-day DOM enough demand?
It depends. Durham, CA has a rental population of 35.4%, which indicates moderate demand. However, the lack of data on days on market (DOM) means we cannot accurately assess how quickly properties are rented out. If the area has high turnover rates or low vacancy rates, it might suggest strong demand despite the limited DOM data. Conversely, if there's low turnover or high vacancy, it could indicate weak demand.
In summary, investing in ZIP 95938 for Section 8 properties is only viable if you consider properties valued below $602,851 where the FMR can cover debt service. The market rent being below FMR makes Section 8 a more attractive option. But the strength of demand remains uncertain without additional data on DOM and vacancy 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.