Section 8 Fair Market Rent (FMR) for ZIP 85207 - 2027

Investment Score for ZIP 85207

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	$1,360
1 Bedroom	$1,460
2 Bedrooms	$1,700
3 Bedrooms	$2,240
4 Bedrooms	$2,490
5 Bedrooms	$2,888
6 Bedrooms	$3,235
7 Bedrooms	$3,494
8 Bedrooms	$3,669

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	$1,700	$340,643	0.5%	F
3BR	$2,240	$450,775	0.5%	F
4BR	$2,490	$684,761	0.36%	F
5BR	$2,888	$961,969	0.3%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85207 (Mesa, AZ) #### Section 8 Voucher Dynamics In ZIP code 85207, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $1800 per month. This amount represents 19.9% of the median household income of $108,699, which is relatively affordable for the average resident. However, the actual rental market dynamics paint a different picture. The Zillow median price for a two-bedroom home in this area is $341,371, which translates into a monthly mortgage payment that far exceeds the FMR. Given the high price-to-FMR ratio of 15.8x, landlords who participate in the Section 8 program must be prepared to accept rents that are significantly lower than market rates. This constraint can limit the number of properties available to voucher holders, as many landlords might find it more profitable to rent to non-voucher tenants willing to pay higher rates. #### Affordability & Renter Profile The population of 85207 is 51,178, with 16.9% being renters. This indicates a relatively low percentage of residents relying on rental housing, suggesting a tight market where demand is likely outpacing supply. The occupancy rate of 86.6% further supports this notion, as it shows that most units are already occupied. The median household income of $108,699 suggests that the majority of residents are financially stable and able to afford homes outside the range of typical Section 8 assistance. Therefore, the renters in this area are likely to be a mix of middle-income families and individuals who are just below the income threshold for Section 8 eligibility but still struggle to find affordable housing. #### Investor Angle From an investor perspective, the ZIP code 85207 presents a challenging environment for cash flow. The FMR for a two-bedroom unit is $1800, while the median home value is $341,371. Assuming a conservative mortgage rate of 4%, a monthly mortgage payment would be approximately $1540, leaving little room for profit after accounting for property taxes, insurance, maintenance, and other expenses. The high price-to-FMR ratio of 15.8x means that the potential for cash flow is limited unless investors can secure properties at below-market rates or manage costs exceptionally well. Given these factors, the investment grade for this ZIP code is considered low for Section 8-focused investors. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Investors should focus on acquiring properties that are priced closer to the FMR levels. For instance, a one-bedroom apartment renting for $1550 per month or a three-bedroom apartment renting for $2400 could provide better cash flow opportunities compared to higher-priced units. 2. **Utilize Property Management Services**: Due to the tight market and high competition, investors should consider using professional property management services to handle the complexities of Section 8 tenancy. This can help ensure compliance with HUD regulations and reduce the administrative burden on the investor. 3. **Consider Renovation Projects**: Investors might benefit from purchasing older, less desirable properties that can be renovated to meet the needs of Section 8 tenants. By improving these properties, they can potentially command slightly higher rents while still remaining within the FMR guidelines. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market in ZIP code 85207, the recommendation for Section 8-focused investors is to **Skip** this area. The financial constraints imposed by the FMR make it difficult to achieve positive cash flow, and the limited number of renters relative to homeowners suggests a challenging environment for finding eligible tenants. Investors looking to enter the Section 8 market would be better served exploring areas with a higher percentage of renters and a more favorable price-to-FMR ratio.

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.