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 | $1,130 |
| 1 Bedroom | $1,210 |
| 2 Bedrooms | $1,320 |
| 3 Bedrooms | $1,660 |
| 4 Bedrooms | $1,860 |
| 5 Bedrooms | $2,158 |
| 6 Bedrooms | $2,417 |
| 7 Bedrooms | $2,610 |
| 8 Bedrooms | $2,741 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,320 | $46,493 | 2.84% | A+ |
| 3BR | $1,660 | $101,747 | 1.63% | A+ |
| 4BR | $1,860 | $175,554 | 1.06% | B |
U.S. Census Bureau data (2024)
The economics of Section 8 housing in ZIP code 35064, which includes Fairfield, Alabama in Jefferson County, are straightforward. For a two-bedroom rental unit, the SAFMR (Small Area Fair Market Rent) is set at $1080 per month for fiscal year 2024. This SAFMR figure is specific to this ZIP code, reflecting the localized rental market conditions.
In comparison, the local market rent, as indicated by ZORI (Zillow Observed Rent Index), stands at $1,124. This slight premium over the SAFMR suggests that landlords might find themselves in a position where they need to consider the differences between these rates when accepting a Section 8 voucher.
A Section 8 voucher pays the difference between the SAFMR and the tenant's portion, which is typically 30% of their income. For simplicity, let’s assume a tenant’s monthly income is $1,800. Their portion would be 30%, or $540. The remaining amount up to the SAFMR is covered by the voucher. In this case, the voucher would pay $540 ($1080 - $540).
However, landlords should also be aware of utility allowances. These allowances vary but generally provide additional funds to cover utilities. If we estimate an average utility allowance of $150 per month, this amount is not included in the SAFMR calculation and can be claimed separately by the landlord.
To summarize, for a two-bedroom unit in ZIP 35064, a landlord can expect the following breakdown:
This results in a total monthly reimbursement of $690 ($540 + $150). Given the local market rent of $1,124, landlords would face a reimbursement gap of $434 per month if they charge the ZORI rate. Conversely, if they set their rent at the SAFMR level of $1080, there would be no surplus or deficit; the landlord receives exactly the SAFMR amount, including the utility allowance.
In conclusion, landlords in ZIP 35064 must carefully weigh the benefits and drawbacks of accepting Section 8 vouchers. While the SAFMR provides a stable baseline, it falls short of the local market rent, creating a notable reimbursement gap of $434 per month for a two-bedroom unit.
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.