Section 8 Fair Market Rent (FMR) for ZIP 85251 - 2027

Investment Score for ZIP 85251

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	$1,570
1 Bedroom	$1,710
2 Bedrooms	$1,980
3 Bedrooms	$2,640
4 Bedrooms	$2,930
5 Bedrooms	$3,399
6 Bedrooms	$3,807
7 Bedrooms	$4,112
8 Bedrooms	$4,318

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$1,710	$236,953	0.72%	D
2BR	$1,980	$367,925	0.54%	F
3BR	$2,640	$682,315	0.39%	F
4BR	$2,930	$935,225	0.31%	F
5BR	$3,399	$2,551,405	0.13%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85251 (Scottsdale, AZ) #### Section 8 Voucher Dynamics In Scottsdale, AZ (ZIP 85251), the Fair Market Rent (FMR) figures for 2026 indicate that a two-bedroom unit is priced at $2200 per month. This represents 28.4% of the median household income of $92,851. However, the actual rent prices in the market are significantly higher. The Zillow median price for a two-bedroom rental unit in this ZIP code is $375,672, which translates to a monthly rent of approximately $3,130 based on a typical mortgage payment structure. The price-to-FMR ratio is 14.2x, meaning that the actual market rent is nearly 14 times the FMR. This suggests that Section 8 voucher holders face significant constraints in finding affordable housing within the area. The FMR is far below the market rent, making it challenging for voucher holders to secure units that landlords are willing to accept under the program. #### Affordability & Renter Profile The renter population in ZIP 85251 is substantial, with 51.5% of residents being renters. Given the occupancy rate of 83.2%, it is clear that there is a high demand for rental properties in this area. However, the affordability gap is evident when comparing the FMR to the actual market rent. With a median household income of $92,851, the average renter would find it difficult to afford a two-bedroom unit at the market rate of $3,130 per month, especially considering that such a rent would consume over 40% of their income. This indicates a tight market where competition for affordable housing is fierce, and many renters may struggle to find suitable accommodation. #### Investor Angle From an investor perspective, the cash flow potential at the FMR level is limited. A two-bedroom unit renting at the FMR of $2200 per month would generate less revenue compared to the market rate of around $3,130. Given the high cost of acquiring property in this ZIP code, with a median home value of $375,672, the return on investment (ROI) would be lower if the unit were rented at the FMR. For instance, a typical mortgage payment for a property valued at $375,672 could range from $1,500 to $2,000 per month, depending on interest rates and loan terms. This leaves little room for profit margins when factoring in maintenance, insurance, and other expenses. Therefore, the investment grade for properties in this ZIP code, particularly those targeting Section 8 tenants, is relatively low due to the financial constraints imposed by the FMR. #### Specific Actionable Insights 1. **Focus on Larger Units**: Given the high price-to-FMR ratio, investors might consider focusing on larger units such as three-bedroom or four-bedroom homes. These units have higher FMRs ($2930 and $3250 respectively) and may offer better cash flow opportunities. Additionally, larger units are often more attractive to families, who tend to be a stable tenant base. 2. **Explore Subsidies and Incentives**: Investors should look into additional subsidies and incentives available for landlords who accept Section 8 vouchers. While the FMR is low, supplementary programs can help bridge the gap between market rent and the FMR, improving the overall profitability of the investment. 3. **Consider Alternative Rental Markets**: Given the tight market conditions and the high cost of acquiring properties, investors might want to explore alternative rental markets in neighboring ZIP codes or cities within Maricopa County that offer more favorable price-to-FMR ratios and potentially higher returns on investment. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP 85251 (Scottsdale, AZ) is to **skip** this market. The high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow. Investors seeking to maximize their returns should consider other areas with more favorable conditions for Section 8 properties. Alternatively, they could focus on larger units or explore subsidies and incentives to improve the financial viability of their investments in this ZIP code.

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.