Section 8 Fair Market Rent (FMR) for ZIP 96817 - 2027

Investment Score for ZIP 96817

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	$1,590
1 Bedroom	$1,690
2 Bedrooms	$2,200
3 Bedrooms	$3,050
4 Bedrooms	$3,680
5 Bedrooms	$4,269
6 Bedrooms	$4,781
7 Bedrooms	$5,163
8 Bedrooms	$5,421

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	$1,690	$360,807	0.47%	F
2BR	$2,200	$448,647	0.49%	F
3BR	$3,050	$1,055,284	0.29%	F
4BR	$3,680	$1,263,562	0.29%	F
5BR	$4,269	$1,354,365	0.32%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 96817 (Honolulu, HI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 96817 in Honolulu, HI, indicate that the maximum allowable rent for a two-bedroom unit is $2,170. However, the Zillow median price for a two-bedroom home in this area is $452,889, which translates to a price-to-FMR ratio of 17.4x. This means that the typical market rent for a two-bedroom property is likely much higher than the FMR. For instance, if we assume a conservative rental yield of 5%, the implied market rent would be approximately $2,264 per month. This is already above the FMR, suggesting that Section 8 voucher holders face significant constraints in finding affordable housing. They may struggle to find properties where landlords are willing to accept the voucher amount due to the high cost of living and rental rates in the area. #### Affordability & Renter Profile ZIP code 96817 has a population of 55,492, with 55.4% of residents being renters. The median household income in this area is $75,476, indicating a relatively affluent community. Despite this, the affordability of housing remains a challenge, especially for low-income households who rely on Section 8 vouchers. The occupancy rate of 92.4% suggests that the market is tight, with most units occupied. This high demand and limited supply make it difficult for renters to find affordable options, particularly those with lower incomes. The fact that 34.5% of the median income is required to afford a two-bedroom unit at the FMR level highlights the financial strain on many residents. Given the high market rents, even moderate-income families might find it challenging to secure housing without assistance. Therefore, the market appears to be undersupplied with affordable units, creating a competitive environment for both tenants and investors. #### Investor Angle From an investor perspective, the FMR levels provide a baseline for potential rental income. However, the reality of the market suggests that properties renting at the FMR will likely face challenges in attracting tenants. The Zillow median price for a two-bedroom home ($452,889) implies that the purchase cost is significantly higher than the value derived from FMR-based rents. To assess cash flow, let’s consider a two-bedroom property. If purchased at the median price, the monthly mortgage payment (assuming a 30-year fixed-rate mortgage at 4%) would be around $2,170. This is nearly equal to the FMR, leaving little room for profit unless the investor can manage costs exceptionally well or the property is rented above the FMR. Given the high price-to-FMR ratio, the investment grade for this ZIP code is relatively low for Section 8-focused investors. The primary constraint is the limited number of properties that can be rented at or below the FMR while still generating a positive cash flow. Additionally, the competition for tenants means that landlords must be prepared to offer amenities and maintenance standards that exceed basic requirements to attract and retain tenants. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should consider smaller units such as studios or one-bedroom apartments. The FMR for a one-bedroom unit is $1,660, which is closer to the implied market rent. This could provide better cash flow opportunities compared to larger units. 2. **Target Affordable Neighborhoods**: Within ZIP code 96817, there may be pockets where rents are slightly lower due to proximity to less desirable areas or specific zoning regulations. Investors should conduct detailed neighborhood analyses to identify these areas and target properties accordingly. 3. **Consider Value-Add Opportunities**: Investors might find success by purchasing slightly distressed properties and improving them to command higher rents. This strategy could help bridge the gap between FMR and market rents, making the investment more viable. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 96817 is to **Skip**. The high price-to-FMR ratio and tight market conditions make it difficult to achieve positive cash flow. While there may be some niche opportunities, the overall market dynamics suggest that this ZIP code is not ideal for investors primarily interested in Section 8 vouchers. Instead, they should look for areas with lower price-to-FMR ratios and more affordable housing options.

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.