Section 8 Fair Market Rent (FMR) for ZIP 85340 - 2027

Investment Score for ZIP 85340

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	$1,670
1 Bedroom	$1,790
2 Bedrooms	$2,080
3 Bedrooms	$2,740
4 Bedrooms	$3,050
5 Bedrooms	$3,538
6 Bedrooms	$3,963
7 Bedrooms	$4,280
8 Bedrooms	$4,494

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	$2,080	$370,917	0.56%	F
3BR	$2,740	$462,058	0.59%	F
4BR	$3,050	$529,433	0.58%	F
5BR	$3,538	$710,170	0.5%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85340 (Litchfield Park, AZ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Litchfield Park, AZ, in ZIP code 85340, as per the 2026 data, is set at $2260 for a two-bedroom unit. This figure represents 22.2% of the median household income of $122,323. However, the actual rental market in Litchfield Park is significantly higher. The Zillow median price for a two-bedroom home is $347,244, which translates into a Price-to-FMR ratio of 12.8x. This means that the actual rent for a two-bedroom unit is likely to be around $28,000 annually, far exceeding the FMR. Consequently, Section 8 voucher holders face significant constraints in finding suitable housing within their budget. The disparity between FMR and actual rents suggests that voucher holders would struggle to find units that landlords are willing to accept at the FMR rate, given the high cost of living in the area. #### Affordability & Renter Profile With a population of 40,919, Litchfield Park has a relatively low percentage of renters at 18.4%, indicating that it is primarily a homeowner-dominated community. The occupancy rate of 95.6% suggests that the rental market is quite tight, with limited availability. Given the median household income of $122,323, most residents can afford higher rents, making it less attractive for lower-income individuals who might rely on Section 8 vouchers. The high median income and low renter percentage indicate that those who do rent are likely to be middle to upper-middle class individuals who can afford market-rate rents. Therefore, the rental market is not particularly affordable for low-income families, and the demand for subsidized housing is likely to be high relative to supply. #### Investor Angle From an investor perspective, the ZIP code 85340 presents a challenging environment for cash flow-positive investments at the FMR level. With the FMR for a two-bedroom unit being $2260, and the actual median rent likely much higher, investors would need to consider whether they can attract tenants willing to pay the FMR. Given the high median income and tight rental market, it is unlikely that many landlords will accept the FMR rates for their properties. Thus, the investment grade for Section 8-focused properties in this ZIP code would be low, as the potential for rental income below market rates would not cover the costs associated with owning and maintaining a property in such a high-cost area. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high FMR-to-market rent ratio, investors should focus on smaller units like one-bedroom apartments, where the FMR is $1950. Although still challenging, these units might have a better chance of attracting Section 8 tenants due to the limited number of available options. 2. **Consider Mixed-Income Developments**: Investors could explore developing mixed-income housing projects that combine Section 8 units with market-rate units. This approach could help balance the financial impact of accepting lower rents for some units while still generating sufficient revenue from others. 3. **Engage with Local Housing Authorities**: To navigate the challenges of the tight rental market, investors should engage closely with local housing authorities to understand any incentives or programs that might support Section 8 rentals. This could include subsidies or other financial assistance that could make the investment more viable. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 85340 is to **Skip** this market. The high actual rents compared to FMR, combined with the tight rental market and high median income, make it difficult to achieve positive cash flow. Additionally, the limited number of renters and the high demand for housing suggest that the supply of affordable units is insufficient to meet the needs of Section 8 voucher holders. Therefore, investing in this ZIP code would likely result in suboptimal returns and challenges in tenant acquisition at the FMR rate.

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.