Location: Birmingham-Hoover, AL | Metro: Birmingham-Hoover, AL HUD Metro FMR Area
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 | $1,130 |
| 1 Bedroom | $1,210 |
| 2 Bedrooms | $1,320 |
| 3 Bedrooms | $1,660 |
| 4 Bedrooms | $1,860 |
| 5 Bedrooms | $2,158 |
| 6 Bedrooms | $2,417 |
| 7 Bedrooms | $2,610 |
| 8 Bedrooms | $2,741 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,320 | $66,685 | 1.98% | A+ |
| 3BR | $1,660 | $149,905 | 1.11% | B |
| 4BR | $1,860 | $182,738 | 1.02% | B |
U.S. Census Bureau data (2024)
In deciding whether to invest in ZIP code 35005 (Adamsville, AL) for Section 8 properties, follow this decision tree based on the provided data:
1) Does FMR $1150 (zip FY 2024) clear debt service on a $142,304 property?
No. To determine if the Fair Market Rent (FMR) of $1150 can cover the debt service, we need to calculate the expected annual income from the property. The annual income would be $1150 multiplied by 12 months, which equals $13,800. This amount is insufficient to cover typical debt service costs associated with a property valued at $142,304. Debt service usually includes mortgage payments, property taxes, insurance, and maintenance, often totaling more than the annual FMR income.
2) Is market rent $1,234 (Census ACS) above, at, or below FMR?
The market rent of $1,234 is above the FMR of $1150. This indicates that landlords could potentially earn more from renting out their properties to non-Section 8 tenants. However, this does not directly impact the feasibility of Section 8 investments unless the gap is significant enough to deter Section 8 tenants from the area.
3) Are 18.7% renters + N/A-day days on market (DOM) enough demand?
It depends. The percentage of renters in Adamsville, AL is 18.7%, which suggests there is some rental demand. However, without specific data on the average days on market (DOM), it's challenging to assess how quickly properties are being rented. If the DOM is low, it implies strong demand, making it more viable for Section 8 investments. Conversely, if the DOM is high, it might indicate slower rental activity and less demand.
Note: For a definitive analysis, additional data such as average DOM and detailed breakdowns of debt service costs for properties in ZIP 35005 would be required.
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.