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 | $1,370 |
| 1 Bedroom | $1,470 |
| 2 Bedrooms | $1,600 |
| 3 Bedrooms | $2,010 |
| 4 Bedrooms | $2,260 |
| 5 Bedrooms | $2,622 |
| 6 Bedrooms | $2,937 |
| 7 Bedrooms | $3,172 |
| 8 Bedrooms | $3,331 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,600 | $128,610 | 1.24% | A |
| 3BR | $2,010 | $217,762 | 0.92% | C |
| 4BR | $2,260 | $278,682 | 0.81% | C |
| 5BR | $2,622 | $329,238 | 0.8% | D |
U.S. Census Bureau data (2024)
With a Fair Market Rent (FMR) set at $1480 for ZIP 35127 (Pleasant Grove, AL) in fiscal year 2024, landlords can expect to receive competitive subsidies through the Section 8 program. The Zillow Observed Rent Index (ZORI) stands at $1,460, indicating that the FMR closely aligns with the actual market rents, providing a solid benchmark for rental pricing. In this area, the median home value is $225,417, suggesting that while property values are moderate, they are still within reach for many investors looking to diversify their portfolios. Renter share in ZIP 35127 is 20.6%, which means that a significant portion of the population relies on rental housing, creating a steady demand for units. With a median income of $70,317, tenants are likely to have the financial stability necessary to meet their rental obligations. Although the average days on market (DOM) is not available, the low price-cut share of 0.2% indicates that properties are generally selling at or near their asking price, a positive sign for real estate investors. This combination of factors—competitive FMR rates, moderate home values, substantial renter share, and stable income levels—makes ZIP 35127 an attractive location for Section 8 investments.
The local economy supports a reasonable standard of living, with the median income sufficient to cover the cost of living and basic needs, including housing. Given the close alignment between the FMR and the ZORI, landlords can be assured that their rental income will be reflective of the current market conditions. The low price-cut share further underscores the strength of the local real estate market, ensuring that investment properties maintain their value over time. For those interested in leveraging the Section 8 program to maximize returns while providing affordable housing options, ZIP 35127 presents a favorable environment. The presence of a significant renter share also suggests a robust tenant pool, reducing the risk of vacancy and ensuring consistent cash flow. In conclusion, the data paints a picture of a stable and supportive market for Section 8 investments in ZIP 35127.
Section 8 verdict: Favorable
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.