Section 8 Fair Market Rent (FMR) for ZIP 85298 - 2027

Investment Score for ZIP 85298

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
2BR	$2,600	$519,870	0.5%	F
3BR	$3,430	$570,538	0.6%	D
4BR	$3,800	$697,063	0.55%	F
5BR	$4,408	$831,622	0.53%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85298 (Gilbert, AZ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 85298 in Gilbert, Arizona, is set by HUD for 2026 as follows: - 0BR: $2190 - 1BR: $2380 - 2BR: $2760 (which represents 21.2% of the median household income) - 3BR: $3680 - 4BR: $4080 These figures represent the maximum rent that a Section 8 voucher holder can pay. However, comparing these FMRs to actual rental rates in the area reveals significant discrepancies. The Zillow median price for a 2BR home in Gilbert is $526,862, which translates to a monthly mortgage payment of approximately $2,660 assuming a 30-year fixed-rate mortgage at 5%. This is already higher than the FMR for a 2BR unit ($2760), indicating that voucher holders would struggle to find properties within their budget. The price-to-FMR ratio for a 2BR unit is 15.9x, meaning that the median home price is nearly 16 times the FMR. This suggests that the actual rental market is far above the FMR levels, creating a challenging environment for voucher holders who must find units that do not exceed their rent limits. For instance, a 2BR unit priced at $2,760 per month would be at the FMR limit, but the average rent in Gilbert could easily exceed this amount due to high demand and limited supply. #### Affordability & Renter Profile Gilbert has a relatively low renter population percentage of 8.9%, indicating that it is primarily a homeowner-dominated market. The occupancy rate of 95.6% suggests that the housing stock is mostly occupied, leaving little room for new renters. The median household income of $156,425 is quite high, reflecting the affluent nature of the community. This high income level means that most residents can afford market-rate housing without assistance, further constraining the availability of affordable units. Given the high median income and low renter population, the typical renter in Gilbert likely falls into a niche category—perhaps young professionals, recent graduates, or individuals who have chosen to rent rather than buy due to personal financial strategies or lifestyle preferences. The tight rental market makes it difficult for voucher holders to find suitable accommodation, as landlords may prefer higher-paying tenants who can afford market rates. #### Investor Angle From an investor perspective, Gilbert's rental market presents both opportunities and challenges. While the FMRs provide a guideline for what voucher holders can pay, the actual rental prices are significantly higher. A 2BR unit priced at $2,760 would be at the FMR limit, but given the price-to-FMR ratio of 15.9x, the average rent could easily be around $44,000 annually. This means that investors would need to consider whether they can attract non-voucher tenants willing to pay market rates. To determine if this ZIP is cash-flow positive at FMR, we need to look at the potential rental income versus expenses. Assuming a 2BR unit is rented at $2,760 per month, the annual rental income would be $33,120. If we factor in typical expenses such as property taxes, insurance, maintenance, and management fees, the net operating income (NOI) might be lower. Property taxes alone can range from $4,000 to $6,000 annually, depending on the property value. Insurance and other maintenance costs could add another $2,000 to $3,000 annually. Therefore, the NOI could be around $25,000 to $27,000, which is still positive but not as robust as market-rate rentals. Investment grade in Gilbert would likely be considered moderate to high risk due to the difficulty in finding tenants willing to accept FMRs. Investors should carefully evaluate their ability to manage properties and attract non-voucher tenants before making any investments. #### Specific Actionable Insights 1. **Focus on Higher-Rate Rentals:** Given the tight rental market and the high price-to-FMR ratio, investors should focus on properties that can command higher rental rates. For example, a 2BR unit priced at $3,500 per month would generate an annual rental income of $42,000, providing a better cash flow and potentially attracting non-voucher tenants. 2. **Consider Multi-Family Properties:** Multi-family properties might offer a better opportunity to diversify tenant types. By having a mix of voucher and non-voucher tenants, investors can balance the risk and ensure steady cash flow. Additionally, multi-family properties often have economies of scale that can reduce per-unit expenses. #### Bottom Line For Section 8-focused investors, Gilbert (ZIP 85298) is a challenging market due to the high price-to-FMR ratio and limited availability of affordable units. The recommendation is to **Skip** this ZIP for Section 8 investments unless you can secure properties that can command higher rental rates or are willing to manage multi-family properties with a diverse tenant base. The tight rental market and high median income make it less favorable for voucher holders, and thus less attractive for investors seeking to rely solely on Section 8 vouchers for cash flow.

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.