Section 8 Fair Market Rent (FMR) for ZIP 85029 - 2027

Investment Score for ZIP 85029

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	$1,220
1 Bedroom	$1,330
2 Bedrooms	$1,540
3 Bedrooms	$2,060
4 Bedrooms	$2,280
5 Bedrooms	$2,645
6 Bedrooms	$2,962
7 Bedrooms	$3,199
8 Bedrooms	$3,359

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	$1,540	$234,769	0.66%	D
3BR	$2,060	$364,283	0.57%	F
4BR	$2,280	$399,281	0.57%	F
5BR	$2,645	$438,845	0.6%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85029 (Phoenix, AZ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 85029 in Phoenix, AZ, is set by HUD for 2026. For a two-bedroom unit, the FMR is $1710, which represents 31.8% of the median household income of $64,556. This suggests that the FMR is reasonably aligned with the local income levels, but it still poses significant constraints for voucher holders. Actual rents in the area, as indicated by Zillow's median price for a two-bedroom unit at $239,994, are significantly higher than the FMR. The price-to-FMR ratio of 11.7x highlights the substantial gap between the actual market rent and the subsidized rates allowed under Section 8 vouchers. This means that landlords who accept Section 8 vouchers will be limited to charging $1710 per month for a two-bedroom unit, while the market rent could be much higher. #### Affordability & Renter Profile ZIP code 85029 has a population of 49,683, with 45.5% of residents being renters. This indicates a relatively high demand for rental properties. The occupancy rate of 95.4% further supports the notion that the rental market is tight, with very few vacant units available. Given the median household income of $64,556, many residents may find it challenging to afford market-rate rents, especially for larger units. The FMR for a four-bedroom unit is $2530, which is 39.2% of the median income, suggesting that families with four or more bedrooms may struggle to find affordable housing without assistance. #### Investor Angle From an investor perspective, the ZIP code 85029 presents a mixed picture when considering cash flow and investment grade. The FMR for a two-bedroom unit is $1710, which is below the median market rent of $239,994. However, the FMR is designed to ensure affordability for low-income households, and thus, it is not intended to reflect market rates. To determine if the ZIP is cash-flow positive at FMR, we need to consider the typical expenses associated with owning and renting out a property. These include mortgage payments, property taxes, insurance, maintenance, and other operational costs. Assuming a conservative estimate where the total monthly expenses for a two-bedroom unit are around $1000, the net cash flow would be $710 per month ($1710 - $1000). This is a positive cash flow, but it is important to note that the actual expenses can vary widely based on the condition of the property and the terms of the mortgage. Additionally, the investment grade would depend on factors such as the stability of the tenant base, the likelihood of maintaining occupancy, and the overall economic health of the area. Given the high occupancy rate and the significant number of renters, the investment grade appears to be moderate to good, provided that the investor can manage the property effectively and maintain a stable tenant base. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units like one-bedroom or studio apartments. The FMR for a one-bedroom unit is $1470, which is lower than the median market rent but still provides a reasonable cash flow if expenses are managed well. This strategy allows investors to cater to single individuals or couples who might be more likely to qualify for Section 8 vouchers due to their lower income requirements. 2. **Consider Renovations**: Investors looking to acquire properties in ZIP 85029 should consider purchasing older homes that require renovations. By investing in upgrades, they can potentially increase the value of the property and improve its appeal to tenants. This approach can help offset some of the lower rents charged under Section 8 vouchers and provide a better return on investment over time. #### Bottom Line For Section 8-focused investors, ZIP code 85029 offers a moderate opportunity. The high demand for rental properties and the tight market conditions suggest that there is a strong potential for maintaining occupancy. However, the significant gap between market rents and FMRs means that investors must carefully manage their expenses to ensure positive cash flow. Given these factors, the recommendation is to **Hold** on to existing investments in this ZIP code, particularly those with smaller units, and to consider strategic acquisitions of properties that can be renovated to meet the needs of Section 8 voucher holders. In summary, while the market dynamics present challenges, the high demand for affordable housing and the potential for positive cash flow make ZIP 85029 a viable option for investors willing to adapt their strategies to the local conditions.

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.