Location: Winston County, AL | Metro: Cullman County, AL
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 | $770 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $1,010 |
| 3 Bedrooms | $1,320 |
| 4 Bedrooms | $1,540 |
| 5 Bedrooms | $1,786 |
| 6 Bedrooms | $2,000 |
| 7 Bedrooms | $2,160 |
| 8 Bedrooms | $2,268 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,320 | $279,009 | 0.47% | F |
| 4BR | $1,540 | $446,021 | 0.35% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 35057 reveals some interesting insights into potential investment opportunities. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area, as determined by HUD for fiscal year 2026, is set at $850 per month. Using this figure, the annualized rental income would be $10,200. When compared to the median home value of $284,132, this translates to an implied gross yield of approximately 3.6%. This calculation is based on the assumption that the property can be rented out at the FMR rate.
On the other hand, the Census Bureau's American Community Survey indicates a market rent of $903 for a 2-bedroom apartment in ZIP 35057. If we annualize this market rent, it amounts to $10,836 per year. Given the same median home value of $284,132, the implied gross yield under this scenario is about 3.8%. This represents a slightly higher return on investment compared to the FMR scenario.
To determine which scenario is more realistic, consider the local rental market dynamics. ZIP 35057 has a renter density of 13.3%, which is relatively low. This suggests that there may be limited demand for rental properties, including those participating in the Section 8 program. Additionally, the N/A-day DOM (days on market) implies that there might be inefficiencies or inconsistencies in how quickly rental units are occupied, further complicating the investment outlook.
In light of these factors, the FMR-based gross yield of 3.6% appears to be the more conservative and likely accurate representation of the potential returns. While the market rent-based gross yield of 3.8% is attractive, the lower renter density and uncertain occupancy rates suggest that achieving the market rent consistently could be challenging. Therefore, investors should prepare for a yield closer to the FMR rate when considering Section 8 investments in ZIP 35057.
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.