Location: Kahului-Wailuku-Lahaina, HI | Metro: Kahului-Wailuku-Lahaina, HI HUD Metro FMR Area
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 | $1,710 |
| 1 Bedroom | $1,800 |
| 2 Bedrooms | $2,370 |
| 3 Bedrooms | $3,060 |
| 4 Bedrooms | $3,820 |
| 5 Bedrooms | $4,431 |
| 6 Bedrooms | $4,963 |
| 7 Bedrooms | $5,360 |
| 8 Bedrooms | $5,628 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,370 | $381,432 | 0.62% | D |
| 3BR | $3,060 | $993,583 | 0.31% | F |
| 4BR | $3,820 | $1,103,087 | 0.35% | F |
| 5BR | $4,431 | $1,204,624 | 0.37% | F |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 96732, which encompasses Kahului, HI, presents a significant opportunity for landlords and small-portfolio investors due to the disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 96732 for fiscal year 2024 is set at $1880, while the Census ACS reports the average market rent at $1452. This means that the FMR is $428 higher than the market rent, representing a 29.4% premium.
This gap makes voucher tenants an attractive option for yield-focused investments. Landlords can receive a guaranteed payment that exceeds the local market rate, ensuring a steady and above-average income stream. In a rental market where only 33.5% of residents are renters, and the median home value stands at $1,034,287, the demand for affordable housing is strong. Despite the median income being relatively low at $101,739, the high FMR provides a financial buffer that can cover maintenance costs and potential vacancy periods.
However, it's important to note that accepting Section 8 vouchers comes with its own set of challenges. The higher FMR does not necessarily translate into higher profits if the cost of maintaining properties to meet HUD standards outweighs the benefits. Additionally, the administrative burden and the need for regular inspections can be time-consuming. For investors, the key is to balance the guaranteed income against these additional costs and obligations.
In conclusion, the premium of $428 or 29.4% over the market rent makes Section 8 a compelling choice for maximizing yields in Kahului, HI. While there are considerations regarding property management and compliance, the financial advantage is clear. Landlords and investors should carefully weigh these factors before deciding to participate in the program.
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.