Section 8 Fair Market Rent (FMR) for ZIP 96707 - 2027

Investment Score for ZIP 96707

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	$2,260
1 Bedroom	$2,400
2 Bedrooms	$3,130
3 Bedrooms	$4,330
4 Bedrooms	$5,230
5 Bedrooms	$6,067
6 Bedrooms	$6,795
7 Bedrooms	$7,339
8 Bedrooms	$7,706

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
1BR	$2,400	$421,595	0.57%	F
2BR	$3,130	$599,512	0.52%	F
3BR	$4,330	$847,134	0.51%	F
4BR	$5,230	$1,008,641	0.52%	F
5BR	$6,067	$1,148,080	0.53%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 96707 (Kapolei, HI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Kapolei, HI (ZIP 96707), is set by HUD for 2026 as follows: - 0BR: $2300 - 1BR: $2470 - 2BR: $3240 (which is 32.4% of the median household income of $119,940) - 3BR: $4510 - 4BR: $5440 These figures represent the maximum amount that a Section 8 voucher holder can pay towards rent based on the number of bedrooms in the unit. However, it's important to note that actual rental prices in Kapolei often exceed these FMRs. For instance, the Zillow median price for a 2BR unit is $593,912, which translates to a monthly mortgage payment well above the FMR when considering typical interest rates and down payments. The price-to-FMR ratio for a 2BR unit is 15.3x, indicating that the actual market rent is significantly higher than the FMR. This creates a significant constraint for voucher holders, who may find it challenging to secure housing that fits within their budget. Landlords might be hesitant to accept vouchers due to the high demand for affordable units and the potential for lower returns compared to market rents. #### Affordability & Renter Profile Kapolei has a population of 48,807, with 28.2% of residents being renters. This indicates a substantial rental market, but given the occupancy rate of 91.1%, the market is relatively tight. The median household income of $119,940 suggests that many residents are financially stable, but the high cost of living and rental prices make it difficult for lower-income individuals to afford housing without assistance. The 2BR FMR of $3240 represents 32.4% of the median household income, which is a reasonable portion but still leaves a significant gap between what voucher holders can afford and what landlords charge. Given the high price-to-FMR ratio, it's clear that the market is very tight, with limited options for those relying solely on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 96707 is likely to be cash-flow negative at the FMR levels. The Zillow median price for a 2BR unit is $593,912, and even if we assume a conservative 4% interest rate and a 20% down payment, the monthly mortgage payment would be approximately $2,500. Adding property taxes, insurance, and maintenance costs, the total expenses would far exceed the FMR of $3240. Given the high price-to-FMR ratio, the investment grade for properties in this ZIP code would be low for Section 8-focused investors. The market is not conducive to generating positive cash flow from Section 8 tenants alone, and the tight rental market means that finding alternative tenants willing to pay market rates could also be challenging. #### Specific Actionable Insights 1. **Focus on Larger Units**: While 2BR units are heavily constrained by the FMR, larger units such as 3BR and 4BR may offer better opportunities. The FMR for a 3BR unit is $4510, and for a 4BR unit, it is $5440. These higher FMRs provide more flexibility for landlords and investors, potentially allowing them to cover mortgage payments and other expenses. 2. **Consider Alternative Funding Sources**: Given the high price-to-FMR ratio, investors might need to look beyond just the rental income from Section 8 vouchers. Exploring options like government grants, tax credits, or partnerships with local organizations could help offset the financial burden and improve the overall profitability of investments in this area. 3. **Evaluate Location-Specific Factors**: Kapolei is part of Honolulu County, which has a strong economy and high demand for housing. Investors should consider the broader economic context and potential for future growth. Additionally, proximity to amenities and job centers could influence the desirability of units and thus the likelihood of securing tenants willing to pay market rates. #### Bottom Line For Section 8-focused investors, the ZIP code 96707 (Kapolei, HI) presents a challenging environment. The high price-to-FMR ratio and tight rental market suggest that this area is not ideal for generating positive cash flow from Section 8 vouchers alone. Therefore, the recommendation is to **skip** this ZIP code unless you can leverage alternative funding sources or focus on larger units where the FMR provides more financial flexibility. In summary, while Kapolei offers a robust rental market, the constraints imposed by the FMR and the high cost of living make it less attractive for Section 8-focused investments.

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.