Location: Marshall County, 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 | $730 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,270 |
| 4 Bedrooms | $1,290 |
| 5 Bedrooms | $1,496 |
| 6 Bedrooms | $1,676 |
| 7 Bedrooms | $1,810 |
| 8 Bedrooms | $1,901 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $920 | $166,123 | 0.55% | F |
| 3BR | $1,270 | $244,719 | 0.52% | F |
| 4BR | $1,290 | $355,790 | 0.36% | F |
| 5BR | $1,496 | $446,377 | 0.34% | F |
U.S. Census Bureau data (2024)
The ZIP code 35016 represents the city of Arab, AL, which has a population of 17,158. With 23.3% of residents being renters, the local rental market is moderately active. The median household income in Arab is $63,685, and the median home value stands at $240,832, indicating a relatively stable and middle-class community.
In terms of rental economics, the Fair Market Rent (FMR) for Arab, AL, in ZIP 35016 for fiscal year 2024 is set at $970. However, the Census American Community Survey (ACS) reports the average market rent to be $753. This discrepancy highlights the potential benefits for landlords who accept Section 8 vouchers, as they can receive higher rents compared to the market rate.
Given these figures, ZIP 35016 would suit both hands-off voucher operators and hands-on value-add buyers. Voucher operators can benefit from the higher FMR, which ensures a steady stream of rental income without the need for constant tenant turnover. On the other hand, value-add buyers might find opportunities to improve properties and command slightly above-market rents, leveraging the stability provided by the Section 8 program while also benefiting from the potential for higher rents once improvements are made.
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.