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 | $1,570 |
| 1 Bedroom | $1,690 |
| 2 Bedrooms | $1,960 |
| 3 Bedrooms | $2,610 |
| 4 Bedrooms | $2,910 |
| 5 Bedrooms | $3,376 |
| 6 Bedrooms | $3,781 |
| 7 Bedrooms | $4,083 |
| 8 Bedrooms | $4,287 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,960 | $444,653 | 0.44% | F |
| 3BR | $2,610 | $568,493 | 0.46% | F |
| 4BR | $2,910 | $766,227 | 0.38% | F |
| 5BR | $3,376 | $977,870 | 0.35% | F |
U.S. Census Bureau data (2024)
Skeptical investors looking into ZIP 85248, located in Chandler, Arizona, often raise several key concerns regarding the feasibility of investing in the area under the Section 8 program. Addressing these concerns with the available data can help clarify the investment landscape.
Objection 1: Will Fair Market Rent (FMR) of $2330 for ZIP 85248 (FY 2024) cover the mortgage on a $563,051 home?
The FMR of $2330 does not directly indicate whether it will cover the mortgage payments on a $563,051 home. However, it's important to consider that the FMR is the maximum amount that the government will pay for housing assistance in the area. To determine if this amount is sufficient, you must calculate the expected monthly mortgage payment based on current interest rates and loan terms. For instance, with a typical 30-year fixed-rate mortgage and an average interest rate, the monthly mortgage payment could be around $2,600, which exceeds the FMR. This suggests that landlords might need to subsidize the difference between the FMR and the actual mortgage cost.
Objection 2: Is there enough renter demand at 22.0%?
A 22.0% rental occupancy rate might seem low, but it's crucial to understand what this percentage represents. The figure likely indicates the portion of the total housing stock that is rented out. A higher percentage would indeed suggest greater demand, but even at 22.0%, there is a substantial number of renters in the area. The data does not provide specifics on how many of these renters qualify for Section 8 assistance, so further research into local tenant demographics and preferences is recommended. Nevertheless, Chandler has seen steady population growth, which generally supports a healthy rental market.
Objection 3: Will vouchers keep pace with $2,188 market rents?
The FMR of $2330 for FY 2024 is designed to reflect the average market rent in the area, currently estimated at $2,188. While the FMR is set to cover a significant portion of market rents, it may not always fully match the exact rent levels. In ZIP 85284, landlords can expect that the voucher amounts will closely align with the market rents, ensuring that they receive a fair compensation for their properties. However, it's essential to note that individual voucher amounts can vary depending on factors such as family size and income level. Landlords should review the specific voucher details before accepting them.
In conclusion, while the data provides a clear picture of the FMR and market rents, it does not offer a complete view of the mortgage costs or the precise number of Section 8 eligible tenants. Investors should conduct thorough due diligence, including checking current mortgage rates and understanding the local rental market dynamics, to make informed decisions.
Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.