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 | $1,650 |
| 1 Bedroom | $1,770 |
| 2 Bedrooms | $1,930 |
| 3 Bedrooms | $2,420 |
| 4 Bedrooms | $2,720 |
| 5 Bedrooms | $3,155 |
| 6 Bedrooms | $3,534 |
| 7 Bedrooms | $3,817 |
| 8 Bedrooms | $4,008 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,930 | $211,345 | 0.91% | C |
| 3BR | $2,420 | $299,349 | 0.81% | C |
| 4BR | $2,720 | $413,661 | 0.66% | D |
| 5BR | $3,155 | $498,176 | 0.63% | D |
U.S. Census Bureau data (2024)
To determine if a landlord should invest in ZIP code 35080 (Helena, AL) for Section 8 properties, follow this decision tree:
1) Does FMR $1,850 (zip FY 2024) clear debt service on a $340,557 property?
No. The Fair Market Rent (FMR) of $1,850 per month would not cover the debt service for a property valued at $340,557. To calculate debt service, we use a typical mortgage rate of around 5% and a 30-year term. This results in a monthly payment of approximately $1,825. While the FMR slightly exceeds the monthly debt service, it does not provide a significant buffer for other expenses such as maintenance, insurance, and property taxes.
2) Is market rent $1,851 (ZORI) above, at, or below FMR?
The Zillow Observed Rent Index (ZORI) for ZIP 35080 is $1,851, which is essentially at par with the FMR of $1,850. This indicates that the rental market is closely aligned with the government's benchmark for fair rents. For landlords, this means that they can expect to charge close to the FMR without facing significant resistance from tenants or the local housing authority.
3) Are 9.0% renters + 31-day DOM enough demand?
It depends. The percentage of renters at 9.0% suggests a relatively low demand for rental properties compared to owner-occupied homes. However, the average days on market (DOM) of 31 days indicates a fairly quick turnover for rentals, suggesting that when rental properties do become available, they are typically filled within a month. This could be interpreted as a sign of stability in the rental market, but it also implies that there might not be a large pool of potential Section 8 tenants ready to move into new units immediately.
Note: Additional analysis on vacancy rates, tenant creditworthiness, and local Section 8 waitlists would further clarify the investment opportunity.
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.