Section 8 Fair Market Rent (FMR) for ZIP 96003 - 2027

Investment Score for ZIP 96003

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	$1,350
1 Bedroom	$1,360
2 Bedrooms	$1,780
3 Bedrooms	$2,460
4 Bedrooms	$2,980
5 Bedrooms	$3,457
6 Bedrooms	$3,872
7 Bedrooms	$4,182
8 Bedrooms	$4,391

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,360	$217,722	0.62%	D
2BR	$1,780	$292,825	0.61%	D
3BR	$2,460	$401,366	0.61%	D
4BR	$2,980	$504,643	0.59%	F
5BR	$3,457	$613,554	0.56%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 96003 (Redding, CA) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 96003 is set by HUD for 2026 as follows: - 0BR: $1320 - 1BR: $1360 - 2BR: $1790 - 3BR: $2490 - 4BR: $3000 These figures represent the maximum rent that a Section 8 voucher holder can pay. However, it's important to note that the actual rents in the market may differ significantly from these FMRs. For instance, the Zillow median price for a 2BR property is $287,315, which translates to a monthly mortgage payment of approximately $1,340 assuming a 4.5% interest rate and a 20% down payment. This is close to the FMR but still leaves little room for profit margins for landlords. Moreover, the price-to-FMR ratio for a 2BR unit is 13.4x, indicating that the median home value is significantly higher than the FMR. This suggests that many rental properties may be priced above the FMR, creating a constraint for voucher holders who might struggle to find affordable housing within their budget. #### Affordability & Renter Profile ZIP code 96003 has a population of 44,923, with 41.5% of residents being renters. The median household income is $72,445, and the occupancy rate stands at 89.9%. The affordability of housing for renters is a significant concern, especially given that the FMR for a 2BR unit is only 29.7% of the median income. This means that a substantial portion of the population may find it challenging to afford housing without assistance. Given the high percentage of renters and the relatively low median income compared to housing costs, this market appears to be quite tight. Many renters may be competing for limited affordable units, making it difficult for those on fixed incomes or receiving vouchers to secure housing. #### Investor Angle From an investor perspective, the key question is whether renting at FMR levels can generate positive cash flow. Based on the provided data, let's consider a 2BR unit with an FMR of $1790. If we assume a typical mortgage payment of around $1,340 (as calculated earlier), property taxes of about $200, insurance of $100, and maintenance costs of $150, the total monthly expenses would be approximately $1,790. This leaves little to no margin for profit, suggesting that the market is very tight for investors seeking positive cash flow. The investment grade for this ZIP code is likely to be low due to the high price-to-FMR ratio and the limited number of units that fall within the FMR range. Investors should be cautious and consider the long-term stability of the area before committing to purchases. #### Specific Actionable Insights 1. **Focus on Units Below FMR**: Given the high price-to-FMR ratio, investors should focus on acquiring units that are priced below the FMR. For example, a 2BR unit priced at $1,500 would provide a better opportunity for positive cash flow compared to one priced at $1,790. This strategy would also make it easier for voucher holders to find suitable housing. 2. **Consider Renovation Projects**: Investors might look into purchasing older or less desirable properties that could be renovated to meet modern standards while still keeping the rent below the FMR. For instance, a 2BR unit priced at $1,300 after renovation could offer a reasonable profit margin while remaining affordable for renters. 3. **Explore Multi-Family Properties**: Multi-family properties often have economies of scale that can help reduce per-unit expenses. A multi-family building with several units priced below the FMR could potentially yield positive cash flow overall, even if individual units do not. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 96003 is to **Skip**. The high price-to-FMR ratio and the tight market conditions make it challenging to achieve positive cash flow. Additionally, the limited number of units that fall within the FMR range means that there is a smaller pool of potential tenants who can use their vouchers effectively. Investors should look for areas with lower ratios and more affordable housing options to ensure a better return on investment.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.