Location: Cullman County, AL | Metro: Decatur, AL MSA
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 | $780 |
| 1 Bedroom | $790 |
| 2 Bedrooms | $1,030 |
| 3 Bedrooms | $1,350 |
| 4 Bedrooms | $1,570 |
| 5 Bedrooms | $1,821 |
| 6 Bedrooms | $2,040 |
| 7 Bedrooms | $2,203 |
| 8 Bedrooms | $2,313 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,350 | $254,818 | 0.53% | F |
U.S. Census Bureau data (2024)
In ZIP 35058, a skeptical investor might question whether the Fair Market Rent (FMR) of $950 can cover the mortgage on a home priced at $262,424. To address this, we need to consider current mortgage rates. As of the latest data, the average 30-year fixed mortgage rate for a $262,424 home is approximately 5.5%. This would result in a monthly mortgage payment of roughly $1,460, excluding property taxes and insurance. Thus, the FMR of $950 does not fully cover the mortgage payment, leaving a shortfall of about $510 per month.
A second objection could be raised regarding the rental market demand. At 25.6%, the rental market share in ZIP 35058 is relatively low compared to national averages. However, the rental market in Cullman, AL, is supported by steady demand for both rentals and owner-occupied homes. The presence of multifamily buildings and the availability of rental properties suggest that there is sufficient interest in renting, though the exact number of potential renters cannot be determined from the data provided.
The final concern is whether housing vouchers will keep pace with market rents of $1,626. According to recent trends, housing vouchers in ZIP 35058 have been increasing to meet the needs of low-income households. However, the specific dollar amount of these vouchers is not readily available. It is important to note that while vouchers help subsidize rents, they may not fully cover the $1,626 market rent, which could pose a risk for landlords relying solely on voucher income.
In summary, while there are some challenges, the rental market in ZIP 35058 shows potential. Landlords should carefully assess their financial situation and consider diversifying their investment portfolio to mitigate risks associated with mortgage payments and voucher income.
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.