Section 8 Fair Market Rent (FMR) for ZIP 35007 - 2027
Location: Birmingham-Hoover, AL | Metro: Birmingham-Hoover, AL HUD Metro FMR Area
Investment Score for ZIP 35007
C
Monthly Rent (2BR)
$1,540
Median Price (2BR)
$174,866
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 | $1,320 |
| 1 Bedroom | $1,410 |
| 2 Bedrooms | $1,540 |
| 3 Bedrooms | $1,930 |
| 4 Bedrooms | $2,170 |
| 5 Bedrooms | $2,517 |
| 6 Bedrooms | $2,819 |
| 7 Bedrooms | $3,045 |
| 8 Bedrooms | $3,197 |
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 |
| 2BR |
$1,540 |
$174,866 |
0.88% |
C |
| 3BR |
$1,930 |
$274,778 |
0.7% |
D |
| 4BR |
$2,170 |
$347,279 |
0.62% |
D |
| 5BR |
$2,517 |
$418,264 |
0.6% |
D |
Demographics & Housing Statistics
U.S. Census Bureau data (2024)
Median Household Income
$88,505
To determine if you should buy in ZIP 35007 (Alabaster, AL) for Section 8 investments, follow these steps:
Step 1: Does FMR $1420 (zip FY 2024) clear debt service on a $292,019 property?
- Yes: If your debt service (the total amount paid towards principal and interest) on a property valued at $292,019 is less than $1420 per month, then the Fair Market Rent (FMR) can cover your costs. This means the property could be profitable under Section 8.
- No: If your debt service exceeds $1420 per month, the FMR will not be sufficient to cover your expenses, making the investment unprofitable for Section 8 tenants.
Step 2: Is market rent $1,786 (ZORI) above, at, or below FMR?
- Above: If the Zillow Observed Rental Index (ZORI) of $1,786 is higher than the FMR of $1420, then market conditions suggest that non-Section 8 tenants would pay more. This indicates a potential risk of having to find alternative tenants who might not qualify for Section 8.
- At or Below: If the ZORI is equal to or lower than the FMR, there is less risk of market rents outpacing the FMR, which means you can rely more heavily on Section 8 tenants to fill your units without significant loss.
Step 3: Are 15.7% renters + 11-day DOM enough demand?
- It Depends: The percentage of renters at 15.7% and an average Days on Market (DOM) of 11 days indicate moderate demand. A high DOM suggests difficulty in finding tenants quickly, while a low DOM suggests fast turnover. With 15.7% of the population renting, there is a reasonable pool of potential Section 8 tenants. However, the success of your investment will depend on how many of those renters qualify for Section 8 and the competition for Section 8 vouchers in the area.
In conclusion, if the FMR of $1420 covers your debt service and the market rent is at or below this figure, the investment in ZIP 35007 is viable. The demand for rentals is moderate but requires further investigation into the local Section 8 program specifics to ensure a steady stream of qualified tenants.
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.