Section 8 Fair Market Rent (FMR) for ZIP 85017 - 2027

Investment Score for ZIP 85017

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	$1,080
1 Bedroom	$1,170
2 Bedrooms	$1,380
3 Bedrooms	$1,870
4 Bedrooms	$2,120
5 Bedrooms	$2,459
6 Bedrooms	$2,754
7 Bedrooms	$2,974
8 Bedrooms	$3,123

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
2BR	$1,380	$186,129	0.74%	D
3BR	$1,870	$311,691	0.6%	F
4BR	$2,120	$340,886	0.62%	D
5BR	$2,459	$367,650	0.67%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85017 (Phoenix, AZ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 85017 in Phoenix, Arizona, is set by HUD for 2026 as follows: - 0BR: $1200 - 1BR: $1300 - 2BR: $1530 - 3BR: $2070 - 4BR: $2350 Comparing these figures to the actual rental market, we can see that the FMR for a 2BR unit is $1530, which is significantly lower than the Zillow median price for a 2BR home, which stands at $192,958. The price-to-FMR ratio for a 2BR unit is 10.5x, indicating that the purchase price is much higher than what a typical renter might pay monthly under the Section 8 program. This suggests that the actual rents in the area are likely higher than the FMRs, making it challenging for voucher holders to find suitable housing. For instance, a voucher holder would struggle to afford a 2BR unit priced at $192,958, even if they were to rent it out for the median monthly rent of $1530. #### Affordability & Renter Profile ZIP code 85017 has a population of 46,129, with 55.6% of residents being renters. The occupancy rate is 92.4%, indicating a relatively tight rental market. Given that the median household income is $58,346, the affordability of housing is a significant concern. A 2BR unit priced at $1530 represents 31.5% of the median income, which is already a substantial portion of a household’s budget. This makes it difficult for low-income families to afford housing without assistance. The high percentage of renters and the tight occupancy rate suggest that there is a strong demand for rental properties in this area. However, the gap between the FMR and the actual rental prices indicates that the market is not particularly affordable for those relying on Section 8 vouchers. This could lead to a situation where many voucher holders are unable to secure housing within their budget constraints, potentially resulting in a shortage of available units for them. #### Investor Angle From an investor perspective, the ZIP code 85017 presents a mixed picture. While the median household income is relatively low, the high percentage of renters and the tight occupancy rate indicate a strong demand for rental properties. However, the high purchase prices relative to the FMR suggest that cash flow will be limited if investors aim to operate strictly within the FMR guidelines. For example, a 2BR unit purchased at the median price of $192,958 would need to generate a monthly rent of approximately $1530 to break even, assuming a mortgage rate of around 5%. This calculation is based on a monthly mortgage payment of roughly $1000 ($192,958 * 5% / 12 months), plus additional costs such as property taxes, insurance, and maintenance, which could easily add another $500 to the monthly expenses. Therefore, the actual cash flow from renting a 2BR unit at the FMR would be minimal, if any. Given the high price-to-FMR ratio, the investment grade for this ZIP code is moderate to low. Investors who are looking to maximize returns through cash flow will likely find this area challenging unless they can negotiate rents above the FMR or find ways to reduce operating costs. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Since the FMR for smaller units (0BR and 1BR) is lower, investors might consider focusing on developing or acquiring smaller units. For instance, a 0BR unit with an FMR of $1200 might be easier to rent out compared to a 2BR unit with an FMR of $1530. Additionally, the demand for smaller units is likely to be higher due to the limited supply and affordability issues. 2. **Consider Alternative Financing Options**: Given the high purchase prices relative to the FMR, traditional financing might not be sufficient to achieve positive cash flow. Investors should explore alternative financing options, such as government-backed loans or grants, that can help reduce the initial capital outlay or lower the monthly mortgage payments. This could make it more feasible to operate within the FMR guidelines while still achieving a reasonable return on investment. 3. **Diversify Rental Portfolio**: To mitigate the risk of relying solely on Section 8 vouchers, investors might want to diversify their rental portfolio by including a mix of Section 8 units and market-rate rentals. This approach can provide a buffer against the limitations of operating strictly within the FMR guidelines and allow for better overall financial performance. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 85017 is to **Skip** this market. The high purchase prices and limited cash flow potential make it less attractive compared to other areas with a similar demographic profile but lower price-to-FMR ratios. Investors seeking opportunities in this ZIP code should carefully evaluate the financial feasibility and consider alternative strategies to improve their chances of success. --- This analysis provides a comprehensive overview of the rental market dynamics in ZIP code 85017, focusing on the challenges faced by Section 8 voucher holders and the implications for investors. The actionable insights offer practical guidance for navigating the market, while the bottom line recommendation helps investors make informed decisions about whether to pursue opportunities in this ZIP code.

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.