Location: Phoenix-Mesa-Chandler, AZ | Metro: Phoenix-Mesa-Chandler, AZ MSA
Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)
| Unit Size | Monthly FMR |
|---|---|
| Studio | $1,430 |
| 1 Bedroom | $1,540 |
| 2 Bedrooms | $1,800 |
| 3 Bedrooms | $2,390 |
| 4 Bedrooms | $2,650 |
| 5 Bedrooms | $3,074 |
| 6 Bedrooms | $3,443 |
| 7 Bedrooms | $3,718 |
| 8 Bedrooms | $3,904 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,540 | $231,556 | 0.67% | D |
| 2BR | $1,800 | $344,117 | 0.52% | F |
| 3BR | $2,390 | $523,957 | 0.46% | F |
| 4BR | $2,650 | $727,350 | 0.36% | F |
| 5BR | $3,074 | $1,333,985 | 0.23% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking at ZIP 85013 in Phoenix, AZ, might raise several concerns regarding the viability of investing in Section 8 properties. Let's delve into these objections using the most recent data available.
Will Fair Market Rent (FMR) of $1,980 cover the mortgage on a $490,793 home?
The FMR of $1,980 for ZIP 85013 in fiscal year 2024 does provide a solid basis for covering a mortgage payment, but it depends on the specifics of the loan. For a $490,793 home, assuming a typical down payment of 20%, the principal amount financed would be around $392,634. With an average interest rate of 5%, the monthly mortgage payment would be approximately $2,115. This means that the FMR would fall slightly short of covering the mortgage alone, highlighting the need for additional income sources such as property tax refunds or utility allowances to bridge the gap.
Is there enough renter demand at 59.7%?
The occupancy rate of 59.7% indicates that over half of the rental units are occupied, which is a positive sign for demand. However, this figure does not directly translate to the proportion of renters who qualify for Section 8. To accurately assess demand, one must consider the local unemployment rate, average household income, and the number of families below the poverty line. The data provided does not offer these specifics, but the occupancy rate suggests that there is a reasonable level of overall rental demand in the area.
Will vouchers keep pace with market rents of $1,518?
The market rent of $1,518 is lower than the FMR of $1,980, indicating that the voucher amount could potentially cover a significant portion of the rent. However, the key issue is whether the voucher program will adjust its payments to match future increases in market rents. The data does not provide projections for future voucher amounts, so this remains uncertain. Investors should monitor local housing authority announcements and trends in rent increases to make informed decisions about the long-term viability of Section 8 investments.
In conclusion, while the FMR of $1,980 provides a good starting point for covering mortgage payments, additional income sources may be necessary. The occupancy rate of 59.7% suggests decent demand, though further research into qualified Section 8 renters is recommended. Lastly, the current voucher amount seems sufficient relative to market rents, but vigilance is required to ensure it keeps pace with future rent hikes.
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.