Section 8 Fair Market Rent (FMR) for ZIP 35054 - 2027

Location: Birmingham-Hoover, AL | Metro: Birmingham-Hoover, AL HUD Metro FMR Area

Investment Score for ZIP 35054

N/A

Monthly Rent (2BR)

$1,490

Median Price (2BR)

$N/A

1% Rule

Annual Yield

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	$1,270
1 Bedroom	$1,370
2 Bedrooms	$1,490
3 Bedrooms	$1,870
4 Bedrooms	$2,100
5 Bedrooms	$2,436
6 Bedrooms	$2,728
7 Bedrooms	$2,946
8 Bedrooms	$3,093

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
3BR	$1,870	$381,128	0.49%	F
4BR	$2,100	$516,406	0.41%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

4,593

Median Household Income

$77,929

Housing Units

1,900

Renter Percentage

10.6%

Occupancy Rate

86.2%

Renter Occupied

173

The ZIP code 35054, located in Alabama, is a residential area that offers a mix of urban convenience and suburban living. With a variety of housing options available, it caters to both homeowners and renters alike. The area's rental market is influenced by several key factors including Fair Market Rent (FMR), market rent, and the percentage of renters. Here’s a detailed breakdown of these factors:

Fair Market Rent (FMR) for ZIP 35054 in fiscal year 2024 is set at $1,130. This figure represents the maximum amount that landlords can charge for Section 8 housing vouchers.
The average market rent for properties in ZIP 35054, according to the latest Census ACS data, stands at $1,064. This indicates that the actual rent charged in the area is slightly below the FMR, offering a competitive yet affordable market for tenants.
The median home value in ZIP 35054 is $412,195. This suggests that the area is primarily composed of owner-occupied homes, with a significant portion of the population owning rather than renting their residences.
Renters make up 10.6% of the total housing units in ZIP 35054. This relatively low percentage indicates a preference for homeownership over renting among the local population.
The median household income in the area is $77,929. This figure provides insight into the economic status of residents, indicating a middle-class demographic capable of supporting moderate rental rates.

Synthesizing these points, investors should note that while the rental market is modest in size due to the high rate of homeownership, it remains stable and predictable. The slight difference between the FMR and the actual market rent presents a balanced opportunity for landlords participating in the Section 8 program, ensuring they can cover costs without overcharging. Given the median income levels, there is a solid foundation for rental demand, particularly from those who benefit from the Section 8 subsidy. However, the limited number of rental units means competition for tenants could be fierce, necessitating well-maintained properties and adherence to fair rental practices.

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.