Section 8 Fair Market Rent (FMR) for ZIP 96816 - 2027

Investment Score for ZIP 96816

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	$1,830
1 Bedroom	$1,940
2 Bedrooms	$2,530
3 Bedrooms	$3,500
4 Bedrooms	$4,230
5 Bedrooms	$4,907
6 Bedrooms	$5,496
7 Bedrooms	$5,936
8 Bedrooms	$6,233

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	$1,940	$474,433	0.41%	F
2BR	$2,530	$660,020	0.38%	F
3BR	$3,500	$1,242,089	0.28%	F
4BR	$4,230	$1,453,187	0.29%	F
5BR	$4,907	$1,603,169	0.31%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 96816 (Honolulu, HI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 96816 in Honolulu, HI, is set to be $2480 for a two-bedroom unit in 2026. This amount represents 26.0% of the median household income in the area, which is $114,609. The FMR is significantly lower than the actual rents in the market. For instance, the Zillow median price for a two-bedroom unit in this ZIP code is $663,782, resulting in a price-to-FMR ratio of 22.3x. This means that the actual market rent for a two-bedroom unit would likely be much higher than the FMR, potentially around $55,300 annually based on the ratio. Given these figures, there are significant constraints for voucher holders. They will find it challenging to secure housing that fits within the FMR guidelines, especially considering the high cost of living in Honolulu. Many landlords may prefer paying tenants who can afford the full market rate rather than those relying on vouchers due to the potential administrative burden and slower payment processes associated with Section 8. #### Affordability & Renter Profile ZIP code 96816 has a population of 50,883, with 37.2% being renters. The occupancy rate stands at 90.9%, indicating a relatively tight rental market. Given the median household income of $114,609, most residents are likely employed in high-paying industries such as healthcare, finance, and tourism. However, the high median home value suggests that many residents are homeowners, and the remaining renters are likely a mix of middle-income earners and those who cannot afford to purchase property. The affordability gap is stark, with the FMR for a two-bedroom unit being only $2480 per month while the median market rent is estimated to be over $4600 per month. This indicates that the market is highly competitive and not very affordable for low-income renters. The high price-to-FMR ratio further underscores the challenge of finding affordable housing for voucher recipients. #### Investor Angle From an investor perspective, the ZIP code 96816 presents both opportunities and challenges. The FMR for a two-bedroom unit is $2480, but the actual market rent is approximately $4600. This discrepancy means that investors who can secure properties at or below the FMR level will likely see positive cash flow. However, given the high price-to-FMR ratio, finding properties at or below the FMR is difficult. The investment grade for this ZIP code would be considered moderate to high risk. While the rental market is strong and demand is high, the regulatory environment and administrative complexities of managing Section 8 properties can be daunting. Additionally, the limited pool of properties available at or below the FMR makes it challenging to scale investments. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom apartments. The FMR for a one-bedroom unit is $1890, which is still far below the market rent. This could provide a better opportunity for positive cash flow and a more manageable number of Section 8 tenants. 2. **Consider Multi-Family Properties**: Multi-family properties might offer a better chance of attracting Section 8 tenants due to economies of scale. Investors should look for complexes where the average rent per unit is closer to the FMR levels. For example, a three-bedroom unit with an FMR of $3450 might be more feasible if it is part of a larger property with a mix of unit sizes. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 96816 is to **Skip**. The high price-to-FMR ratio and the tight rental market make it difficult to find properties that fit within the FMR guidelines. Additionally, the administrative overhead and regulatory requirements of managing Section 8 properties in a high-cost area like Honolulu may outweigh the benefits. Investors should consider other ZIP codes with a more favorable price-to-FMR ratio and a less competitive rental market.

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.