Section 8 Fair Market Rent (FMR) for ZIP 35078 - 2027

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

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$850
1 Bedroom	$910
2 Bedrooms	$990
3 Bedrooms	$1,240
4 Bedrooms	$1,400
5 Bedrooms	$1,624
6 Bedrooms	$1,819
7 Bedrooms	$1,965
8 Bedrooms	$2,063

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

2,170

Median Household Income

$75,056

Housing Units

1,023

Renter Percentage

17.4%

Occupancy Rate

83.8%

Renter Occupied

149

The ZIP code 35078, located within the Birmingham-Hoover, AL HUD Metro FMR Area, presents itself as a solid cash-flow anchor for a Section 8 portfolio strategy. This conclusion is based on the significant spread between the Fair Market Rent (FMR) of $1240 for the fiscal year 2024 and the current market rent of $842.

To understand why this ZIP code is an ideal cash-flow anchor, consider the following points:

Economic Stability: The median income in ZIP 35078 is $75,056, which indicates a stable economic environment where residents can afford higher rents without straining their finances. This stability supports long-term tenancy, reducing turnover rates and associated costs.
Rental Demand: With a 17.4% renter share, there is a consistent demand for rental properties in this area. Landlords can rely on steady occupancy, ensuring regular cash flow.
Pricing Advantage: The difference between the FMR and the market rent is substantial at $398 per month. This means that landlords participating in the Section 8 program can charge closer to the FMR, thereby increasing their monthly cash flow compared to the average market rent.
Property Values: The median home value in ZIP 35078 is $283,778. While this figure does not directly impact the cash flow from rentals, it suggests that property values are reasonable, making it feasible for landlords to acquire and maintain properties within this ZIP code without incurring excessive capital costs.

In summary, ZIP 35078 stands out as a cash-flow anchor due to its favorable economic conditions, strong rental demand, and the advantageous pricing differential under the Section 8 program. Small-portfolio investors should consider including properties in this ZIP code to bolster their financial performance.

Data Sources: FMR data from HUD (2027). 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.