Section 8 Fair Market Rent (FMR) for ZIP 85008 - 2027

Investment Score for ZIP 85008

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	$1,170
1 Bedroom	$1,270
2 Bedrooms	$1,480
3 Bedrooms	$1,980
4 Bedrooms	$2,190
5 Bedrooms	$2,540
6 Bedrooms	$2,845
7 Bedrooms	$3,073
8 Bedrooms	$3,227

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,270	$210,300	0.6%	D
2BR	$1,480	$300,559	0.49%	F
3BR	$1,980	$427,620	0.46%	F
4BR	$2,190	$521,153	0.42%	F
5BR	$2,540	$646,565	0.39%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85008 (Phoenix, AZ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 85008 in Phoenix, Arizona, for 2026 indicate that the rent for a two-bedroom apartment is set at $1640. This figure represents 29.7% of the median household income in the area, which is $66,353. However, the actual median rent for a two-bedroom apartment on Zillow is $305,447, which translates to a price-to-FMR ratio of 15.5x. This means that the actual rental prices are significantly higher than what the FMR suggests, making it challenging for Section 8 voucher holders to find affordable housing. The voucher amount is typically capped at the FMR, so tenants would need to pay the difference between the FMR and the actual rent out-of-pocket, which can be a substantial burden given the income levels in the area. #### Affordability & Renter Profile ZIP code 85008 has a high percentage of renters at 68.7%, indicating a strong demand for rental properties. The occupancy rate of 92.1% further supports this, showing that most units are occupied, suggesting a relatively tight market. Given the median household income of $66,353, the majority of residents are likely to be middle-class families or individuals who work in various sectors such as retail, healthcare, and manufacturing. The high rent-to-income ratio implies that many residents are already struggling with housing costs, and the gap between FMR and actual rents exacerbates this issue. For example, a tenant with a two-bedroom voucher would have to pay an additional $1414 per month to cover the actual rent, which is nearly 21% of their median income. This makes it difficult for low-income households to afford housing without significant financial strain. #### Investor Angle From an investor perspective, the ZIP code 85008 presents a mixed picture when considering cash flow and investment grade. The FMR for a two-bedroom unit is $1640, but the actual median rent is $305,447. While the actual rent is much higher, it also means that the potential cash flow for an investor renting to Section 8 voucher holders is limited by the FMR cap. If an investor were to rent at the FMR, they would likely face a negative cash flow situation due to the high property values and associated costs like property taxes and maintenance. To illustrate, let’s consider the cost structure: - Property value: $305,447 - Annual property tax: Assuming a tax rate of 1%, this would be approximately $3054 annually. - Maintenance costs: Typically around 1% of the property value, which would be about $3054 annually. - Insurance: Around $1000 annually. - Utilities: Varies but can be estimated at $200 monthly, or $2400 annually. - Total annual expenses: $11,508 If the investor rents at the FMR of $1640 per month, the annual rental income would be $19,680. Subtracting the total annual expenses ($11,508) leaves a net income of only $8,172 annually, or about $681 per month. This is far below the actual median rent and indicates a negative cash flow scenario if the investor aims to maximize returns. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Investors should focus on acquiring properties with lower rents that are closer to the FMR. For instance, a one-bedroom apartment with a rent of $1410 would be more aligned with the FMR of $1410, providing a better chance for positive cash flow. This strategy would involve looking for older or less desirable properties where the rent is closer to the FMR. 2. **Consider Mixed-Income Developments**: Developing or investing in mixed-income housing projects could be a viable option. By offering a mix of units priced at or slightly above the FMR, investors can cater to both Section 8 voucher holders and other low-income renters while still achieving a reasonable return on investment. This approach helps mitigate the risk of negative cash flow while addressing the affordability gap. 3. **Explore Alternative Subsidies**: Investors might want to explore alternative subsidies beyond Section 8 vouchers. Programs like Low-Income Housing Tax Credits (LIHTC) or other local incentives could provide additional revenue streams to offset the lower rents associated with FMR. These programs often require compliance with certain affordability requirements but can offer significant financial benefits. #### Bottom Line Given the high actual rent prices compared to the FMR, and the resulting negative cash flow scenarios for properties rented at FMR rates, the recommendation for Section 8-focused investors is to **Skip** this ZIP code unless they can acquire properties at significantly lower rents or find ways to supplement their income through alternative subsidies. The current market dynamics make it challenging to achieve positive cash flow solely through Section 8 vouchers, and the high property values suggest that the initial investment required would be substantial relative to the returns. Therefore, investors should look for opportunities in areas with lower property values or more favorable rent-to-income ratios to ensure a sustainable and profitable investment strategy.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.