Section 8 Fair Market Rent (FMR) for ZIP 96789 - 2027

Investment Score for ZIP 96789

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	$2,030
1 Bedroom	$2,160
2 Bedrooms	$2,810
3 Bedrooms	$3,890
4 Bedrooms	$4,700
5 Bedrooms	$5,452
6 Bedrooms	$6,106
7 Bedrooms	$6,594
8 Bedrooms	$6,924

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	$2,160	$372,110	0.58%	F
2BR	$2,810	$493,034	0.57%	F
3BR	$3,890	$980,515	0.4%	F
4BR	$4,700	$1,132,835	0.41%	F
5BR	$5,452	$1,249,034	0.44%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 96789 (Mililani, HI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Mililani, HI, as of 2026, is set at $2720 for a two-bedroom unit. This amount represents 25.7% of the median household income of $127,066, which is relatively affordable compared to the national average. However, the actual rental market in Mililani is significantly higher than the FMR. The Zillow median price for a two-bedroom unit is $497,705, indicating a price-to-FMR ratio of 15.2x. This suggests that the actual rent for a two-bedroom unit could be around $41,346 annually ($3445.50 monthly), far exceeding the FMR cap of $2720. Consequently, voucher holders face significant constraints in finding suitable housing within their budget. They would need to look for units priced below the FMR threshold, which might be limited in availability due to the high overall rental prices. #### Affordability & Renter Profile With a median household income of $127,066, Mililani is a relatively affluent area. Only 22.2% of the population are renters, indicating a strong owner-occupied market. The occupancy rate of 97.3% suggests that the housing stock is nearly fully utilized, making it a tight market for both owners and renters. Given the high median income and the low percentage of renters, those who do rent in this area are likely to be financially stable and able to afford higher rents. However, the FMR constraints mean that many voucher holders may struggle to find affordable options, especially for larger units like three or four bedrooms, where the FMRs are $3780 and $4560 respectively. #### Investor Angle From an investor perspective, the ZIP code 96789 presents a challenging environment for cash flow-positive investments based solely on FMR. The actual rental prices are much higher than the FMR, meaning that properties rented to Section 8 voucher holders will generate lower revenue compared to the market rates. For example, a two-bedroom unit priced at the Zillow median of $497,705 would have a monthly rental cost of approximately $3445.50, but the FMR cap is only $2720. This implies that investors relying on FMR would see a substantial reduction in potential rental income. To determine the investment grade, we must consider factors such as vacancy rates, property values, and the overall economic stability of the area. With a 97.3% occupancy rate, the risk of vacancies is low, which is favorable for investors. However, the tight market and high actual rental prices suggest that there may be limited opportunities to acquire properties at prices that would make them cash-flow positive under the FMR cap. Additionally, the high median income indicates a robust local economy, which could support higher rental prices and property values over time. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high actual rental prices, investors should focus on smaller units such as one-bedroom or studio apartments. These units have lower FMR caps ($2080 and $1930 respectively) and might be easier to find at prices that allow for cash-flow positive investments. Additionally, these units are less likely to be occupied by families with children, who typically require larger units. 2. **Consider Alternative Funding Sources**: Since the FMR is significantly lower than market rates, investors might need to explore alternative funding sources or subsidies to make their investments viable. This could include state or local housing assistance programs, tax incentives, or other forms of financial aid that can help bridge the gap between FMR and market rates. 3. **Evaluate Long-Term Potential**: Despite the challenges posed by the FMR cap, the high median income and low vacancy rate indicate a strong underlying demand for rental properties. Investors should evaluate the long-term potential of the area, considering factors such as job growth, population trends, and economic stability. If the area continues to grow and remain economically vibrant, the value of rental properties could increase over time, providing a solid return on investment even if initial cash flows are modest. #### Bottom Line For Section 8-focused investors, the ZIP code 96789 (Mililani, HI) presents a challenging environment due to the high actual rental prices and tight market conditions. While the area has a strong economy and low vacancy rates, the FMR caps are substantially lower than market rates, making it difficult to achieve cash-flow positive investments. Therefore, the recommendation for this ZIP code is to **Skip** unless you can secure additional funding or subsidies to offset the difference between FMR and market rates. If you decide to invest, focus on smaller units and evaluate the long-term potential of the area carefully.

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.