Section 8 Fair Market Rent (FMR) for ZIP 85255 - 2027

Investment Score for ZIP 85255

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	$2,080
1 Bedroom	$2,240
2 Bedrooms	$2,600
3 Bedrooms	$3,430
4 Bedrooms	$3,800
5 Bedrooms	$4,408
6 Bedrooms	$4,937
7 Bedrooms	$5,332
8 Bedrooms	$5,599

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	$2,240	$317,612	0.71%	D
2BR	$2,600	$625,788	0.42%	F
3BR	$3,430	$1,069,307	0.32%	F
4BR	$3,800	$1,697,393	0.22%	F
5BR	$4,408	$2,624,360	0.17%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85255 (Scottsdale, AZ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 85255 in Scottsdale, AZ, is set by HUD for 2026. The FMR values are as follows: - 0BR: $2190 - 1BR: $2380 - 2BR: $2760 - 3BR: $3680 - 4BR: $4080 Comparing these FMRs to actual rents, we see that the Zillow median price for a 2BR unit is $636,576. This translates to a price-to-FMR ratio of 19.2x, indicating that the actual rent prices are significantly higher than the FMRs. For instance, a 2BR unit priced at $636,576 would have a monthly mortgage payment of approximately $2,780 if financed at a typical rate and term, which is already close to the FMR for a 2BR unit ($2760). Given that the FMR for a 2BR unit represents only 23.6% of the median household income of $140,616, it is clear that there are significant constraints for voucher holders. They must find units that do not exceed the FMR, which is challenging given the high actual rent prices. Additionally, landlords may be hesitant to accept vouchers due to the lower rent compared to market rates. #### Affordability & Renter Profile ZIP code 85255 has a population of 45,346, with 26.9% being renters. The occupancy rate stands at 84.9%, suggesting a relatively tight rental market. Given the median household income of $140,616, most residents are likely to be affluent, making it difficult for low-income renters to afford housing without assistance. The high price-to-FMR ratio indicates that the market is highly competitive and expensive for those relying solely on their income to pay rent. The renter profile in this area is likely to include individuals who can afford higher rents, such as professionals, business owners, and retirees. However, for those who qualify for Section 8 vouchers, finding affordable housing will be a challenge. The tight market means that there is limited inventory available at or below FMR levels, putting additional pressure on voucher holders to secure housing. #### Investor Angle From an investor perspective, the ZIP code 85255 presents a mixed picture. While the high median home value suggests strong demand and potential appreciation, the cash flow from renting properties at FMR levels is likely to be negative. For example, a 2BR unit with a Zillow median price of $636,576 would have a monthly mortgage payment of around $2,780, while the FMR for a 2BR unit is $2760. This leaves little room for profit, especially when considering maintenance, property management, and other costs associated with rental properties. Given the high price-to-FMR ratio and the tight rental market, the investment grade for this ZIP code is low for Section 8-focused investors. The primary constraint is the inability to generate positive cash flow at FMR levels, making it less attractive for investors seeking immediate returns. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should consider focusing on smaller units, such as 0BR or 1BR, where the FMR is lower. For instance, a 1BR unit with an FMR of $2380 might be more manageable financially, even though the overall market is expensive. 2. **Seek Out-of-Market Opportunities**: Given the high price-to-FMR ratio, investors might want to look for opportunities outside of the immediate ZIP code 85255. Neighboring areas with similar amenities but lower median home values could offer better cash flow and investment potential. 3. **Consider Long-Term Appreciation**: While cash flow may be negative, the high median home value suggests strong long-term appreciation potential. Investors looking to hold properties for several years might benefit from the capital gains, even if they cannot rely on rental income alone. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 85255 is to **skip**. The high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow. Instead, investors should explore neighboring areas with similar characteristics but more favorable price-to-FMR ratios. Alternatively, they could consider a long-term investment strategy, focusing on the potential for capital appreciation rather than short-term rental income.

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.