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 | $960 |
| 1 Bedroom | $1,030 |
| 2 Bedrooms | $1,120 |
| 3 Bedrooms | $1,410 |
| 4 Bedrooms | $1,580 |
| 5 Bedrooms | $1,833 |
| 6 Bedrooms | $2,053 |
| 7 Bedrooms | $2,217 |
| 8 Bedrooms | $2,328 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,030 | $29,381 | 3.51% | A+ |
| 2BR | $1,120 | $43,495 | 2.58% | A+ |
| 3BR | $1,410 | $75,170 | 1.88% | A+ |
| 4BR | $1,580 | $116,461 | 1.36% | A |
| 5BR | $1,833 | $197,538 | 0.93% | C |
U.S. Census Bureau data (2024)
The potential risks for investing in Section 8 properties in ZIP code 35020 in Bessemer, AL, must be carefully considered. Tenant turnover is a significant concern, with the market rent at $1,119 compared to the Fair Market Rent (FMR) for FY 2024 at $1,020. This difference can lead to higher turnover rates as tenants may struggle to afford the gap between the two figures. Additionally, the vacancy exposure is high due to the lack of available data on days on market (DOM), which indicates uncertainty regarding how quickly vacant units can be filled. The deferred maintenance risk is also notable, considering the typical home value of $66,310 and the median income of $35,362. These figures suggest that homeowners might not have sufficient funds to keep up with necessary repairs and maintenance, potentially leading to higher costs for landlords in maintaining their properties.
However, these risks are offset by the high renter share of 40.6%, which typically correlates with a higher demand for rental vouchers. This means that there is a substantial pool of potential tenants who may qualify for Section 8 assistance, thereby increasing the likelihood of finding qualified renters. Furthermore, the high renter density can mitigate some of the financial risks associated with vacancies and turnover, as it ensures a steady stream of interested tenants.
Verdict: Moderate risk for a first-time Section 8 landlord.
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.