Location: Santa Fe, NM | Metro: Santa Fe, NM 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 | $1,290 |
| 1 Bedroom | $1,450 |
| 2 Bedrooms | $1,780 |
| 3 Bedrooms | $2,190 |
| 4 Bedrooms | $2,340 |
| 5 Bedrooms | $2,714 |
| 6 Bedrooms | $3,040 |
| 7 Bedrooms | $3,283 |
| 8 Bedrooms | $3,447 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,450 | $277,252 | 0.52% | F |
| 2BR | $1,780 | $450,299 | 0.4% | F |
| 3BR | $2,190 | $602,059 | 0.36% | F |
| 4BR | $2,340 | $822,110 | 0.28% | F |
| 5BR | $2,714 | $1,384,579 | 0.2% | F |
U.S. Census Bureau data (2024)
The market analysis for Section 8 investors in ZIP code 87505, located in Santa Fe, NM, within the Santa Fe, NM MSA metro area, reveals that voucher tenants can achieve positive cash flow at the HUD Fair Market Rent (FMR) rate of $1,540 for fiscal year 2024. The market rent, as indicated by ZORI (Zillow's Observed Rental Index), stands at $1,760, meaning landlords can expect a slight cushion when renting to Section 8 tenants at the FMR rate. This positive cash flow scenario is particularly favorable for investors looking to maintain steady income streams without relying on premium units.
To further analyze the investment potential, consider the median home value in ZIP 87505, which is $563,376. Using this figure, we can calculate a rent-to-price ratio of approximately 0.31%, indicating that rental properties are relatively affordable compared to the overall housing market. This ratio suggests that the area may be attractive for both renters and buyers, potentially stabilizing the local real estate market.
The median Days on Market (DOM) for rental listings is 34 days, which is a reasonable period for finding tenants. Additionally, the price-cut share of 0.2% indicates that landlords rarely need to reduce their asking rents, suggesting strong demand for rental properties in the area. These metrics support the idea that the rent-versus-buy dynamics favor landlords, as they can maintain higher rents without significant concessions.
The strongest investor angle in ZIP 87505 is cash flow. With the HUD FMR rate being lower than the market rent, landlords can ensure a steady and reliable income stream while also benefiting from the stable housing market 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.