Location: Gadsden, 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 | $790 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,160 |
| 4 Bedrooms | $1,300 |
| 5 Bedrooms | $1,508 |
| 6 Bedrooms | $1,689 |
| 7 Bedrooms | $1,824 |
| 8 Bedrooms | $1,915 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $920 | $172,412 | 0.53% | F |
| 3BR | $1,160 | $237,375 | 0.49% | F |
| 4BR | $1,300 | $356,723 | 0.36% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $970 for ZIP 35121 in Oneonta, AL, can sufficiently cover the mortgage on a home valued at $223,487. Using a mortgage calculator, such as those available on Zillow or calculateme.com, we find that for a typical 30-year fixed-rate mortgage with an average interest rate of around 5%, the monthly payment for a $223,487 home would be approximately $1,200. This means that the FMR alone would not fully cover the mortgage payment. However, it's important to note that FMR includes utilities and other costs, so landlords should consider these factors when setting rent.
The investor may also doubt if there is sufficient renter demand in Oneonta, given that only 25.8% of households are renters. While this percentage is relatively low compared to urban areas, it still represents a significant number of potential tenants. According to Realtor.com, the rental demand trend in Oneonta is stable, with a slight increase over the past five years. This suggests that while the demand isn't exceptionally high, it remains consistent and could support a modest rental portfolio.
Another concern is whether the Housing Choice Voucher program will keep pace with the market rents of $711. The data shows that the FMR for Oneonta is $970, which is higher than the market rent. This indicates that voucher holders might have some flexibility to pay above the market rent, potentially up to the FMR. However, it's worth noting that voucher amounts can vary widely based on individual circumstances and local housing authority policies. To ensure financial viability, landlords should consult the local housing authority to understand the specific voucher payment rates and requirements.
In summary, while the FMR does not fully cover the mortgage payment on a $223,487 home, it can contribute significantly. The rental demand, though not extremely high, is steady. And although the voucher program may not always match market rents, it offers a reliable source of income for landlords willing to participate.
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.