Section 8 Fair Market Rent (FMR) for ZIP 96818 - 2027

Investment Score for ZIP 96818

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	$2,490
1 Bedroom	$2,650
2 Bedrooms	$3,450
3 Bedrooms	$4,780
4 Bedrooms	$5,770
5 Bedrooms	$6,693
6 Bedrooms	$7,496
7 Bedrooms	$8,096
8 Bedrooms	$8,501

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	$2,650	$330,151	0.8%	C
2BR	$3,450	$474,395	0.73%	D
3BR	$4,780	$791,064	0.6%	D
4BR	$5,770	$1,265,719	0.46%	F
5BR	$6,693	$1,313,568	0.51%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 96818 (Honolulu, HI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 96818 in Honolulu, HI, for 2026 is set at $3,410 for a two-bedroom unit. This figure represents 40.7% of the median household income of $100,567, indicating that it is relatively affordable for the average resident. However, the actual rental market in this area is significantly higher, with Zillow reporting a median price of $483,511 for a two-bedroom home. The price-to-FMR ratio of 11.8x suggests that the actual rental costs far exceed the FMR, creating a significant constraint for Section 8 voucher holders. For example, a voucher holder would only be able to afford a two-bedroom unit priced at $3,410, whereas the typical market rent for such a unit is much higher. This means that voucher holders are likely limited to a smaller subset of available units that fall within their budget, potentially leading to a high demand for affordable housing options. #### Affordability & Renter Profile ZIP code 96818 has a population of 54,822, with 62.2% of residents being renters. This indicates a strong rental market, but also a challenging environment for affordability given the high rent-to-income ratio. The occupancy rate of 93.5% suggests that the market is quite tight, with few vacant units available. The high percentage of renters combined with the tight market conditions implies that there is a significant demand for rental properties, particularly those that are affordable. Given the median household income and the FMR, it is clear that the majority of renters in this area are middle-class individuals who may struggle to find affordable housing options. The disparity between FMR and actual rental prices highlights the difficulty many renters face in securing housing that fits within their budget. #### Investor Angle From an investor perspective, the FMR figures provide a baseline for determining potential cash flow and investment grade. A two-bedroom unit priced at the FMR of $3,410 would generate a monthly rental income that is well below the market rate of approximately $4,090 (assuming a 12-month annualized rent of $483,511). This suggests that while investing in properties that meet the FMR criteria can be lucrative due to the high demand for affordable housing, it may not be as profitable as renting at market rates. However, the tight market and high occupancy rate indicate that there is a strong likelihood of consistent tenancy, which can be beneficial for long-term investment stability. To determine the investment grade, we must consider factors such as the cost of acquisition, maintenance, and vacancy rates. Given the high median property value, the initial investment required to purchase a property in this area is substantial. However, the high occupancy rate and the strong demand for affordable housing suggest that the risk of vacancy is low, making this a relatively safe investment. The key challenge for investors will be finding properties that are both affordable and meet the quality standards required by Section 8 programs. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors should focus on acquiring properties that are priced at or near the FMR levels. For instance, a two-bedroom unit priced at $3,410 would be ideal for attracting Section 8 tenants. This strategy ensures a steady stream of income and aligns with the high demand for affordable housing in the area. 2. **Consider Renovation Projects**: Given the high price-to-FMR ratio, there may be opportunities to acquire older properties at lower prices and renovate them to meet the FMR criteria. This could involve purchasing a property for less than $483,511 and bringing it up to standard, thereby positioning it as an attractive option for Section 8 voucher holders. 3. **Utilize Local Real Estate Networks**: Engaging with local real estate networks and brokers can help identify properties that are currently underpriced or have potential for renovation. These networks can provide valuable insights into the local market dynamics and help investors navigate the complexities of finding suitable properties. #### Bottom Line Given the high demand for affordable housing and the tight market conditions in ZIP code 96818, the recommendation for Section 8-focused investors is to **Buy**. While the initial investment may be high due to the overall property values in the area, the strong occupancy rate and the need for affordable housing make this a viable and potentially profitable investment opportunity. However, investors should carefully select properties that are priced at or near the FMR levels to ensure they can attract and retain Section 8 tenants effectively.

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.