Location: Tucson, AZ | Metro: Tucson, 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 | $1,180 |
| 1 Bedroom | $1,320 |
| 2 Bedrooms | $1,700 |
| 3 Bedrooms | $2,350 |
| 4 Bedrooms | $2,680 |
| 5 Bedrooms | $3,109 |
| 6 Bedrooms | $3,482 |
| 7 Bedrooms | $3,761 |
| 8 Bedrooms | $3,949 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,320 | $135,169 | 0.98% | C |
| 2BR | $1,700 | $281,494 | 0.6% | D |
| 3BR | $2,350 | $439,562 | 0.53% | F |
| 4BR | $2,680 | $584,487 | 0.46% | F |
| 5BR | $3,109 | $730,795 | 0.43% | F |
U.S. Census Bureau data (2024)
To decide whether to invest in ZIP 85704 (Tucson, AZ) for Section 8 properties, follow this decision tree:
1) Does FMR $1530 (zip FY 2024) clear debt service on a $448,221 property?
If your debt service on a property valued at $448,221 is less than $1530 per month, then the answer is yes. For example, if you finance the property at a rate that results in a monthly mortgage payment of $1000, the FMR of $1530 would cover the debt service and provide a buffer for maintenance and other costs. However, if your debt service exceeds $1530, the answer is no. A property with a higher debt service would not be viable under the Section 8 program without additional subsidies.
2) Is market rent $1,384 (ZORI) above, at, or below FMR?
The ZORI (Zillow Rent Index) for ZIP 85704 is $1,384, which is below the FMR (Fair Market Rent) of $1530. This means that landlords can potentially set rents closer to the FMR level, attracting Section 8 tenants without leaving much money on the table compared to market rates. If market rents were above the FMR, landlords would need to consider whether they could still attract Section 8 tenants by setting lower rents. If market rents were equal to the FMR, the decision would depend on other factors such as tenant preferences and competition.
3) Are 42.1% renters + 15-day DOM enough demand?
In ZIP 85704, 42.1% of residents are renters, and the average days on market (DOM) for rental listings is 15 days. These figures indicate a strong demand for rentals. With a high percentage of renters and quick turnover of rental listings, there is sufficient demand to support Section 8 investments. However, if the percentage of renters was significantly lower or the DOM was substantially longer, the answer would be it depends. Landlords would need to assess the local housing market dynamics and consider whether the demand is robust enough to ensure steady occupancy.
In conclusion, if your debt service is covered by the FMR, market rents are below the FMR, and there is strong demand indicated by the rental demographics and DOM, then the answer to investing in ZIP 85704 for Section 8 properties is yes. The data supports a positive investment outlook with these conditions.
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.