Location: Chilton 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 | $1,500 |
| 1 Bedroom | $1,600 |
| 2 Bedrooms | $1,750 |
| 3 Bedrooms | $2,200 |
| 4 Bedrooms | $2,480 |
| 5 Bedrooms | $2,877 |
| 6 Bedrooms | $3,222 |
| 7 Bedrooms | $3,480 |
| 8 Bedrooms | $3,654 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,750 | $181,323 | 0.97% | C |
| 3BR | $2,200 | $244,686 | 0.9% | C |
| 4BR | $2,480 | $298,380 | 0.83% | C |
| 5BR | $2,877 | $354,704 | 0.81% | C |
U.S. Census Bureau data (2024)
If a landlord is considering investing in ZIP code 35040 (Calera, AL) for Section 8 properties, they should follow this decision tree based on the specific data provided.
Step 1: Does the Fair Market Rent (FMR) of $1,540 cover the debt service on a property valued at $254,840?
No: The FMR does not sufficiently cover the debt service for a property of that value. Landlords should look for properties priced lower or consider other areas where FMR better supports the local housing market.
Yes: Proceed to the next step.
Step 2: Is the Zillow Observed Rent Index (ZORI) of $1,632 above, at, or below the FMR?
Above: The market rent is higher than the FMR, indicating a potential gap between what landlords can charge non-Section 8 tenants and the amount they would receive from Section 8 tenants. This suggests that landlords might need to carefully weigh the benefits of Section 8 versus the potential income from market-rate rentals.
At or Below: The ZORI is close to or below the FMR, which means that market conditions align well with Section 8 rates. Landlords can expect a smoother transition into the program without significant revenue loss compared to market rates.
Step 3: Do the 21.1% of renters and a 44-day Days on Market (DOM) indicate sufficient demand?
It Depends: With 21.1% of the population renting, there is a moderate level of rental demand. However, a 44-day DOM suggests that properties take about 44 days to sell or lease, which is relatively quick but still requires consideration. If the landlord is comfortable with the rental rate and the property value aligns with their investment goals, then the demand is likely adequate. However, if the landlord seeks high liquidity and minimal vacancy periods, they may want to investigate further into the stability of the rental market and tenant turnover rates.
In summary, for ZIP 35040 (Calera, AL), landlords must first ensure that the FMR covers their debt service before considering the alignment of ZORI and the sufficiency of rental demand. Each step provides clear guidance on whether to proceed with a Section 8 investment or explore other opportunities.
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.