Section 8 Fair Market Rent (FMR) for ZIP 85710 - 2027

Investment Score for ZIP 85710

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	$1,000
1 Bedroom	$1,110
2 Bedrooms	$1,430
3 Bedrooms	$1,980
4 Bedrooms	$2,250
5 Bedrooms	$2,610
6 Bedrooms	$2,923
7 Bedrooms	$3,157
8 Bedrooms	$3,315

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
1BR	$1,110	$118,414	0.94%	C
2BR	$1,430	$206,968	0.69%	D
3BR	$1,980	$301,724	0.66%	D
4BR	$2,250	$342,271	0.66%	D
5BR	$2,610	$376,960	0.69%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 85710 (Tucson, AZ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 85710 is set by HUD for the year 2026. For a two-bedroom unit, the FMR is $1,420, which represents 29.8% of the median household income in the area. However, the actual rental market in Tucson is significantly higher. The Zillow median price for a two-bedroom home is $211,732, indicating a price-to-FMR ratio of 12.4 times. This means that the actual median rent for a two-bedroom unit is likely much higher than the FMR. Given that the FMR is lower than the actual market rents, Section 8 voucher holders face significant constraints. They may struggle to find units that accept their vouchers due to the high demand and limited supply of affordable housing. Landlords who do accept vouchers must be willing to rent below market rates, which can be a disincentive given the higher overall rental costs. #### Affordability & Renter Profile ZIP code 85710 has a population of 56,125, with 45.5% of residents being renters. The occupancy rate is 92.6%, suggesting a relatively tight rental market. With a median household income of $57,175, the affordability of housing is a critical issue. The FMR for a two-bedroom unit is $1,420, which is 29.8% of the median income. This indicates that a significant portion of the population would have difficulty affording market-rate rents, especially those relying on Section 8 vouchers. The high rent-to-income ratio and the substantial percentage of renters suggest that there is a strong demand for affordable housing. Given the tight market conditions, it is likely that many residents are facing financial stress due to housing costs. This could lead to increased competition for affordable units and potentially higher turnover rates among tenants. #### Investor Angle From an investor perspective, the ZIP code 85710 presents a mixed picture. The FMR for a two-bedroom unit is $1,420, but the actual market rent is likely much higher, given the price-to-FMR ratio of 12.4 times. If an investor were to purchase a property at the median price of $211,732 and rent it out at the FMR, they would need to ensure that the property management costs and mortgage payments are covered by the FMR. To determine if this ZIP code is cash-flow positive at FMR, we need to consider the typical expenses associated with owning a rental property. Assuming a conservative estimate of 1% of the purchase price for annual maintenance and property taxes, plus a mortgage payment based on a 30-year fixed-rate loan at 5% interest, the total monthly expenses would be approximately: - Maintenance and Property Taxes: $211,732 * 0.01 = $2,117.32 annually, or $176.44 per month - Mortgage Payment: $211,732 * 0.05 / 12 = $881.97 per month Total Monthly Expenses: $176.44 + $881.97 = $1,058.41 With an FMR of $1,420, the net cash flow would be: $1,420 - $1,058.41 = $361.59 per month This suggests that properties rented at FMR levels could still generate positive cash flow, albeit modestly. However, the challenge lies in finding tenants willing to pay the FMR, as many landlords might prefer higher market rents. The investment grade for this ZIP code would depend on various factors, including the stability of the local economy, the demand for affordable housing, and the ability to attract and retain Section 8 voucher holders. Given the high rent-to-income ratio and the tight market, the investment grade would be moderate to low, as the risk of vacancy and tenant turnover is higher. #### Specific Actionable Insights 1. **Focus on Affordable Units**: Investors should focus on acquiring properties that are already priced close to the FMR. For example, a two-bedroom unit priced around $1,420 would be more attractive to Section 8 voucher holders and less risky in terms of vacancy. This would also help mitigate the impact of higher property management costs. 2. **Consider Multi-Family Properties**: Given the high percentage of renters, multi-family properties may offer better opportunities for stable cash flow. A building with multiple units, even if some are rented at below-market rates, could still provide a reasonable return on investment if the majority of units are occupied. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can increase the likelihood of attracting Section 8 voucher holders. This can involve understanding the local regulations and processes, as well as ensuring compliance with HUD requirements. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 85710 is to **Hold**. While there is potential for positive cash flow, the tight rental market and high rent-to-income ratio present challenges. Investors should carefully evaluate the specific properties and their pricing before making any purchases. The key to success in this market will be finding properties that are affordable to Section 8 voucher holders and managing them effectively to minimize vacancy and turnover.

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.