Location: Tucson, 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 | $1,080 |
| 1 Bedroom | $1,170 |
| 2 Bedrooms | $1,380 |
| 3 Bedrooms | $1,870 |
| 4 Bedrooms | $2,120 |
| 5 Bedrooms | $2,459 |
| 6 Bedrooms | $2,754 |
| 7 Bedrooms | $2,974 |
| 8 Bedrooms | $3,123 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,870 | $157,418 | 1.19% | B |
U.S. Census Bureau data (2024)
A landlord considering investing in ZIP code 85321 for Section 8 properties must follow a structured decision-making process based on the following criteria:
Step 1: Debt Service Coverage Ratio (DSCR)
The Fair Market Rent (FMR) for ZIP 85321 in fiscal year 2024 is set at $1570. To determine if this FMR can cover the debt service on a property valued at $138,393, calculate the DSCR. If the monthly rental income of $1570 exceeds the monthly mortgage payment and other expenses such as taxes and insurance, then the answer is yes. For example, if the total monthly debt service is $1200, the FMR clearly covers it. However, if the monthly debt service is higher than $1570, the answer is no.
Step 2: Market Rent Comparison
The average market rent in ZIP 85321, according to Census ACS data, is $875 per month. Compare this figure to the FMR of $1570. Since the FMR is significantly higher than the market rent, landlords can expect a positive spread when renting to Section 8 tenants. This makes the investment more attractive compared to renting to non-Section 8 tenants at the lower market rate.
Step 3: Rental Demand Assessment
In ZIP 85321, 28.9% of residents are renters. However, the data does not provide the number of days on the market (DOM), which would indicate how quickly rental units are typically filled. Assuming that the high percentage of renters translates into sufficient demand, the next consideration is the vacancy rate. If the vacancy rate is low, it suggests strong demand and supports a "yes" decision. Conversely, if the vacancy rate is high, it indicates weaker demand, leading to an "it depends" outcome, where additional research into local housing trends and economic factors is required.
Decision Tree Summary
Based on the data, ZIP 85321 appears to be a favorable location for Section 8 investments due to the high FMR relative to both the property value and market rent, coupled with a significant portion of the population being renters. However, landlords must also consider the specific financial details of their property and local vacancy rates to make a fully informed decision.
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.