Section 8 Fair Market Rent (FMR) for ZIP 85295 - 2027

Investment Score for ZIP 85295

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	$1,710
1 Bedroom	$1,830
2 Bedrooms	$2,130
3 Bedrooms	$2,810
4 Bedrooms	$3,120
5 Bedrooms	$3,619
6 Bedrooms	$4,053
7 Bedrooms	$4,377
8 Bedrooms	$4,596

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
2BR	$2,130	$383,311	0.56%	F
3BR	$2,810	$465,474	0.6%	D
4BR	$3,120	$590,138	0.53%	F
5BR	$3,619	$801,367	0.45%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85295 (Gilbert, AZ) #### Introduction Gilbert, AZ, located in Maricopa County, is a rapidly growing suburban area with a population of 56,744. The median household income is relatively high at $118,467, which suggests a strong economic base. However, 37.5% of the residents are renters, indicating a significant demand for rental properties. With an occupancy rate of 95.8%, the rental market appears to be quite tight, suggesting limited availability and potentially higher competition among landlords. #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Gilbert, AZ, in 2026 is set at specific rates for different unit sizes: - 0BR: $1820 - 1BR: $1980 - 2BR: $2300 (which is 23.3% of the median income) - 3BR: $3070 - 4BR: $3400 These FMRs represent the maximum amount that a Section 8 voucher holder can pay for rent. For instance, a two-bedroom unit should not exceed $2300 per month under the voucher program. However, the actual rents in the area are significantly higher. The Zillow median price for a two-bedroom property is $388,995, which translates to a monthly mortgage payment of approximately $1,600 based on typical financing terms. When combined with other costs such as property taxes, insurance, and maintenance, the total monthly cost for a landlord would likely exceed the FMR. Given the high Zillow median price and the low FMR, the price-to-FMR ratio for a two-bedroom unit is 14.1x. This means that the actual purchase price of a property is about 14 times the FMR for a similar-sized rental unit. This high ratio indicates that the housing market is expensive relative to the rental market, making it challenging for voucher holders to find affordable units within their budget. #### Affordability & Renter Profile The median income in Gilbert, AZ, is $118,467, and the FMR for a two-bedroom unit is $2300, which represents 23.3% of the median income. This suggests that the average renter in Gilbert has a relatively high income, and they can afford to pay more than the FMR for a two-bedroom unit. However, the 37.5% of residents who are renters might face affordability challenges due to the high actual rents compared to the FMR. The tight market with an occupancy rate of 95.8% implies that there is a strong demand for rental properties, and the supply is limited. This situation could lead to higher rents and increased competition among tenants, especially those relying on Section 8 vouchers. Given the high price-to-FMR ratio, it is likely that many voucher holders will struggle to find suitable housing options within their budget, leading to a potential mismatch between the available inventory and the needs of voucher holders. #### Investor Angle From an investor perspective, the FMR for Gilbert, AZ, is significantly lower than the actual rents. For example, the FMR for a two-bedroom unit is $2300, while the Zillow median price suggests a much higher cost of ownership. This discrepancy means that landlords who rely solely on FMRs to cover their expenses may face financial challenges. To determine if the ZIP code is cash-flow positive at FMR, we need to consider the total cost of ownership. Assuming a mortgage payment of $1,600 (based on the Zillow median price), plus additional costs like property taxes ($2,000 annually), insurance ($1,000 annually), and maintenance ($500 annually), the total monthly cost would be around $2,300. This aligns closely with the FMR for a two-bedroom unit but leaves little room for profit or unexpected expenses. The investment grade for this ZIP code would be considered moderate to low due to the high price-to-FMR ratio and the limited profit margin for landlords. Investors looking to maximize returns might find it challenging to achieve positive cash flow without significant subsidies or additional revenue streams. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units, such as one-bedroom or studio apartments, where the FMR is lower. For instance, the FMR for a one-bedroom unit is $1980, which is still below the Zillow median price but offers a slightly better chance of covering costs. 2. **Consider Subsidies and Partnerships**: To improve profitability, investors might want to explore partnerships with local government agencies or non-profit organizations that provide additional subsidies for low-income tenants. This could help bridge the gap between the actual costs and the FMR. 3. **Target Areas with Lower Property Values**: Within Gilbert, AZ, there might be pockets or neighborhoods with lower property values. Identifying these areas could allow investors to acquire properties at a more reasonable cost, thereby improving the chances of achieving positive cash flow. #### Bottom Line For Section 8-focused investors, Gilbert, AZ (ZIP 85295) presents a challenging environment due to the high price-to-FMR ratio and the tight rental market. The recommendation is to **Skip** this ZIP code unless you can identify specific strategies to mitigate the risks, such as focusing on smaller units, seeking subsidies, or targeting lower-cost neighborhoods. The current dynamics suggest that achieving positive cash flow purely through FMRs is difficult, and the overall investment grade is moderate to low. This analysis is based solely on the provided data and does not account for any external factors or changes in the market beyond the given information.

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.