Section 8 Fair Market Rent (FMR) for ZIP 85201 - 2027

Investment Score for ZIP 85201

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	$1,190
1 Bedroom	$1,300
2 Bedrooms	$1,510
3 Bedrooms	$2,010
4 Bedrooms	$2,230
5 Bedrooms	$2,587
6 Bedrooms	$2,897
7 Bedrooms	$3,129
8 Bedrooms	$3,285

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	$1,300	$188,335	0.69%	D
2BR	$1,510	$247,245	0.61%	D
3BR	$2,010	$375,763	0.53%	F
4BR	$2,230	$439,210	0.51%	F
5BR	$2,587	$556,912	0.46%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85201 (Mesa, AZ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 85201 is set by HUD for the year 2026. The FMRs for various bedroom sizes are as follows: - 0BR: $1320 - 1BR: $1440 - 2BR: $1670 (which is 29.8% of the median household income) - 3BR: $2230 - 4BR: $2470 These figures represent the maximum amount that a Section 8 voucher holder can pay for rent. However, the actual rental rates in the area often exceed these amounts. For instance, the Zillow median price for a 2BR property is $255,766, which translates to a monthly mortgage payment significantly higher than the FMR. Given the Price-to-FMR ratio of 12.8x, it is clear that the actual market rents far surpass the FMRs. This means that voucher holders face significant constraints in finding affordable housing within their budget. They would likely need to look for properties that are below the median market rate or negotiate with landlords to accept the voucher amount. #### Affordability & Renter Profile ZIP code 85201 has a population of 51,400, with 60.6% of residents being renters. This high percentage indicates a strong demand for rental properties. The occupancy rate of 91.1% suggests that the market is relatively tight, with most available units being occupied. The median household income of $67,294 places a significant portion of the population in a lower-middle-income bracket, making them prime candidates for Section 8 vouchers. Given that 2BR units cost $1670 under the FMR but have a median market price of $255,766, the affordability gap is stark. The average renter would find it challenging to afford market-rate rentals without financial assistance. This tight market condition makes it difficult for low-income families to secure housing, especially when the actual rents are so much higher than the FMRs. #### Investor Angle From an investor perspective, the ZIP code 85201 presents a mixed picture. The FMRs provide a baseline for rental income, but the actual market rents suggest that there is potential for higher returns. However, the challenge lies in finding properties that can be rented out at or near the FMRs while still generating positive cash flow. To determine if the ZIP code is cash-flow positive at FMR, we must consider the typical expenses associated with owning and renting out a property. These include mortgage payments, property taxes, insurance, maintenance, and other operating costs. If we assume a conservative estimate of 1% of the median home value ($255,766) as annual property tax, that would be approximately $2,558 per year, or $213 per month. Adding a reasonable estimate for insurance, maintenance, and other operating costs, let's say another $200 per month, brings the total monthly expenses to around $413 for a 2BR unit. At the FMR of $1670 for a 2BR unit, the net cash flow would be $1670 - $413 = $1257 per month. This is a positive cash flow, but it is important to note that this assumes the property can be rented out at the FMR and that all expenses are covered. In reality, the market rents are much higher, and investors might struggle to find tenants willing to pay only the FMR. The investment grade for this ZIP code is moderate. While there is a strong demand for rental properties, the tight market and high actual rents make it challenging to find properties that can be rented out at the FMR. Investors should carefully evaluate the local rental market and consider the possibility of negotiating with landlords to accept Section 8 vouchers. #### Specific Actionable Insights 1. **Target Properties Below Market Rates**: Investors should focus on acquiring properties that are priced below the median market rate. For example, a 2BR unit priced at $200,000 would have a lower monthly mortgage payment, making it easier to achieve positive cash flow at the FMR of $1670. This would also increase the likelihood of attracting Section 8 voucher holders who are looking for affordable housing options. 2. **Negotiate with Landlords**: Since the actual market rents are significantly higher than the FMRs, investors should work on building relationships with landlords to encourage them to accept Section 8 vouchers. This could involve offering incentives such as reduced vacancy periods or guaranteed rent payments through the voucher program. 3. **Consider Multi-Family Units**: Given the high renter percentage and occupancy rate, multi-family units (such as duplexes or small apartment buildings) could be more attractive for investors. These units offer the potential for higher rental income and can be more easily managed at the FMR levels. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 85201 is **Hold**. While there is a strong demand for rental properties and the FMRs provide a stable baseline for rental income, the actual market rents are too high to generate significant cash flow at the FMR levels. Investors should carefully evaluate the local rental market and consider targeting properties below the median market rate or negotiating with landlords to accept Section 8 vouchers. This ZIP code offers moderate investment opportunities, but the tight market and high actual rents pose challenges that require strategic planning and negotiation skills.

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.