Location: Cullman 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 | $730 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $960 |
| 3 Bedrooms | $1,260 |
| 4 Bedrooms | $1,470 |
| 5 Bedrooms | $1,705 |
| 6 Bedrooms | $1,910 |
| 7 Bedrooms | $2,063 |
| 8 Bedrooms | $2,166 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,260 | $217,224 | 0.58% | F |
U.S. Census Bureau data (2024)
When considering whether to invest in ZIP code 35077 for Section 8 properties, follow this decision tree:
Step 1: Determine if the Fair Market Rent (FMR) of $970 can cover the debt service on a property valued at $213,826. This calculation hinges on the specific mortgage terms and interest rates. For instance, if the annual debt service (including principal, interest, taxes, and insurance) exceeds $11,640 ($970 x 12 months), then the answer is no. However, if it falls below or equals this figure, proceed to Step 2.
Step 2: Compare the Zillow Observed Rent Index (ZORI) of $1,091 to the FMR. In ZIP 35077, the ZORI is above the FMR, indicating that market rents are higher than the government-set limits for Section 8 vouchers. This suggests that landlords might face challenges renting exclusively to Section 8 tenants since the rent they can charge is capped at $970. Landlords would need to consider if they are willing to accept lower rental income compared to market rates.
Step 3: Evaluate the demand for rentals. The data shows that 27.8% of residents are renters. Additionally, the days-on-market (DOM) is listed as N/A, which could imply either very quick turnover or an issue with data collection. Given the percentage of renters, there is a reasonable base of potential tenants. However, without a clear DOM figure, it's challenging to gauge the speed at which units are filled. If the DOM is typically low, this supports a strong demand scenario, leading to a "yes" on investment viability. Conversely, if DOM is high, it signals weaker demand, resulting in an "it depends" outcome, where other factors such as property condition and location become critical.
In summary, if the FMR of $970 clears the debt service on a $213,826 property and you're willing to accept rental income below market rates, then the presence of 27.8% renters becomes a key factor. A low DOM indicates strong demand, making ZIP 35077 a viable investment for Section 8 properties. However, a high DOM shifts the decision towards "it depends," requiring further analysis into local rental trends and competition.
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.