Section 8 Fair Market Rent (FMR) for ZIP 96822 - 2027

Investment Score for ZIP 96822

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	$1,820
1 Bedroom	$1,930
2 Bedrooms	$2,520
3 Bedrooms	$3,490
4 Bedrooms	$4,210
5 Bedrooms	$4,884
6 Bedrooms	$5,470
7 Bedrooms	$5,908
8 Bedrooms	$6,203

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	$1,930	$316,337	0.61%	D
2BR	$2,520	$426,550	0.59%	F
3BR	$3,490	$1,471,543	0.24%	F
4BR	$4,210	$1,756,355	0.24%	F
5BR	$4,884	$1,943,255	0.25%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 96822 (Honolulu, HI) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 96822 in Honolulu, HI, is set by HUD for 2026. For a two-bedroom unit, the FMR is $2510, which represents 31.4% of the median household income of $95,947. This indicates that the FMR is significantly lower than the actual market rent for similar units. According to Zillow, the median price for a two-bedroom rental unit in this ZIP code is $442,323, which translates to a monthly rent of approximately $3686 based on typical mortgage rates and rental yields. This means that the actual market rent ($3686) is nearly 1.5 times higher than the FMR ($2510). Consequently, tenants with Section 8 vouchers face significant constraints in finding affordable housing within the ZIP code. They must either pay a substantial portion of their income towards rent or seek units outside the designated FMR range, which can be challenging given the high occupancy rate of 92.8%. #### Affordability & Renter Profile ZIP code 96822 has a population of 43,747, with 46.3% of residents being renters. The high rent-to-income ratio suggests that the market is tight, with limited options for low-income renters. Given the median household income of $95,947, it’s clear that the majority of residents have above-average incomes, making it difficult for those relying solely on Section 8 vouchers to find suitable housing. The occupancy rate of 92.8% further supports the notion that the market is highly competitive. With such a high rate, there is little room for new rentals to enter the market, and existing units are likely to remain occupied. This tight market condition makes it even harder for voucher holders to secure housing, as landlords may prefer higher-paying tenants who do not require government assistance. #### Investor Angle From an investor perspective, the ZIP code offers a mixed outlook. While the median home price for a two-bedroom unit is $442,323, the FMR of $2510 is only about 14.7 times the median price. This high price-to-FMR ratio indicates that properties are significantly overpriced relative to the FMR, which could pose challenges for cash flow if investors rely solely on Section 8 rents. To determine if the ZIP code is cash-flow positive at FMR, we need to consider the typical mortgage payment and operating expenses. Assuming a 30-year fixed-rate mortgage at 4%, the monthly mortgage payment on a $442,323 property would be around $2100. Adding typical operating expenses like property taxes, insurance, and maintenance, the total cost could easily exceed the FMR of $2510. Therefore, it is unlikely that investors would achieve positive cash flow purely from Section 8 rents. Given these factors, the investment grade for this ZIP code would be considered low for Section 8-focused investors. The high price-to-FMR ratio and the tight market conditions make it less attractive compared to other areas where rents are closer to the FMR and there is more flexibility in tenant selection. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should focus on smaller units, such as one-bedroom apartments, which have a lower FMR of $1920. Although the price-to-FMR ratio remains high, the demand for smaller units is typically higher among low-income renters, including those with Section 8 vouchers. Additionally, the median household income suggests that many residents can afford higher rents, so smaller units might still attract non-voucher tenants willing to pay more. 2. **Consider Renovation Projects**: Investors could look into purchasing older, undervalued properties and renovating them to meet the needs of low-income renters. By targeting units that are below the median price but still within the FMR range, they can potentially achieve better cash flow. For example, a renovated one-bedroom apartment priced at $300,000 would have a monthly mortgage payment of around $1400, leaving room for positive cash flow when combined with the $1920 FMR. 3. **Diversify Tenant Base**: To mitigate risks associated with relying solely on Section 8 rents, investors should consider diversifying their tenant base. This could include offering a mix of units at different sizes and price points to attract both voucher holders and non-voucher tenants. Diversification can help stabilize cash flow and reduce dependency on a single type of tenant. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 96822 is to **Skip** this market. The high price-to-FMR ratio and tight market conditions make it challenging to achieve positive cash flow. Moreover, the limited availability of units within the FMR range and the strong competition from higher-income renters suggest that this area is not ideal for those looking to invest primarily in Section 8 properties. Investors should consider other ZIP codes with more favorable price-to-FMR ratios and greater availability of units within the FMR range.

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.