Section 8 Fair Market Rent (FMR) for ZIP 96786 - 2027

Investment Score for ZIP 96786

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	$2,180
1 Bedroom	$2,320
2 Bedrooms	$3,020
3 Bedrooms	$4,180
4 Bedrooms	$5,050
5 Bedrooms	$5,858
6 Bedrooms	$6,561
7 Bedrooms	$7,086
8 Bedrooms	$7,440

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	$2,320	$272,703	0.85%	C
2BR	$3,020	$468,833	0.64%	D
3BR	$4,180	$841,061	0.5%	F
4BR	$5,050	$887,315	0.57%	F
5BR	$5,858	$1,016,054	0.58%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 96786 (Wahiawa, HI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 96786 is set by HUD for 2026 as follows: - 0BR: $2110 - 1BR: $2270 - 2BR: $2970 (which represents 41.7% of the median household income) - 3BR: $4130 - 4BR: $4980 These figures represent the maximum amount that a Section 8 voucher holder can pay for rent based on the size of the unit. However, the actual rental market in Wahiawa is significantly higher. The Zillow median price for a 2BR unit is $477,112, which translates into a monthly mortgage payment of approximately $2,075 assuming a 4.5% interest rate and a 30-year fixed mortgage. This is already close to the FMR for a 2BR unit, but the actual rental rates are likely even higher due to the high price-to-FMR ratio of 13.4x. Therefore, it is highly unlikely that landlords will accept Section 8 vouchers for units priced at the Zillow median or above. This means that voucher holders are constrained to finding units that are significantly below the market average, often in less desirable areas or with fewer amenities. #### Affordability & Renter Profile The population of Wahiawa is 40,658, with 68.9% of residents being renters. This indicates a strong demand for rental properties in the area. The occupancy rate stands at 92%, suggesting that the rental market is relatively tight, with few vacancies available. Given that 41.7% of the median household income ($85,554) is allocated towards a 2BR unit’s FMR, it is clear that housing is a significant financial burden for many residents. The high percentage of renters and the tight occupancy rate indicate that there is a substantial need for affordable housing options, particularly those that can accommodate families with children who might require larger units. #### Investor Angle From an investor perspective, the cash flow potential at FMR levels is questionable. With the Zillow median price for a 2BR unit being $477,112, the monthly mortgage payment would be around $2,075. Adding typical operating expenses such as property taxes, insurance, maintenance, and utilities, the total cost could easily exceed the FMR of $2970. For instance, if we assume a conservative estimate of $500 per month in additional costs, the total monthly expense would be $2,575, leaving little room for profit. Moreover, the high price-to-FMR ratio of 13.4x suggests that the rental market is overpriced relative to the FMR. This makes it challenging for investors to find properties that can generate positive cash flow while adhering to FMR guidelines. The investment grade in this ZIP code would be considered low due to the limited number of properties that can be rented out at FMR without incurring losses. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units like 0BR or 1BR apartments. These units have lower FMRs ($2110 and $2270 respectively), making it easier to find properties that can be rented out at these rates without significant financial strain. Additionally, these units are more likely to be occupied by single individuals or couples who might be more flexible with their living arrangements. 2. **Consider Outlying Areas**: While the core of Wahiawa has a high price-to-FMR ratio, exploring outlying areas within the ZIP code might reveal more affordable options. These areas could offer better opportunities for positive cash flow, as the rental rates are likely to be lower. Investors should conduct thorough research to identify neighborhoods where rental rates align more closely with FMRs. 3. **Engage with Local Housing Authorities**: To navigate the challenges posed by the high price-to-FMR ratio, investors should engage with local housing authorities and seek incentives or subsidies that can help offset the higher costs. This could include tax breaks, grants, or other financial assistance programs designed to encourage affordable housing development. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 96786 is to **Skip** this market. The high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow while adhering to FMR guidelines. Investors looking to enter this market should consider alternative strategies, such as focusing on smaller units or seeking outlying areas with more affordable rental rates, but overall, the conditions are not favorable for Section 8 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.