Section 8 Fair Market Rent (FMR) for ZIP 35207 - 2027

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

Investment Score for ZIP 35207

A+

Monthly Rent (2BR)

$1,020

Median Price (2BR)

$41,440

1% Rule

2.46%

Annual Yield

29.54%

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$870
1 Bedroom	$940
2 Bedrooms	$1,020
3 Bedrooms	$1,280
4 Bedrooms	$1,440
5 Bedrooms	$1,670
6 Bedrooms	$1,870
7 Bedrooms	$2,020
8 Bedrooms	$2,121

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,020	$41,440	2.46%	A+
3BR	$1,280	$62,557	2.05%	A+

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

7,709

Median Household Income

$31,486

Housing Units

3,877

Renter Percentage

49.1%

Occupancy Rate

80.3%

Renter Occupied

1,529

A decision tree for evaluating whether to purchase properties in ZIP 35207 (Birmingham, AL) for Section 8 investment is outlined below. The analysis is based on the Fair Market Rent (FMR), market rent, and rental demand.

Step 1: Does the FMR of $970 cover the debt service on a property valued at $58,713?

Yes: If the FMR of $970 can cover the debt service, proceed to Step 2.
No: Do not invest in this area. The FMR does not provide sufficient income to meet financial obligations.

Step 2: How does the market rent of $788 compare to the FMR?

Market Rent Below FMR: With the market rent at $788, which is below the FMR of $970, you can expect that tenants who qualify for Section 8 will be able to pay the higher FMR rate. Proceed to Step 3.
Market Rent At or Above FMR: If the market rent were equal to or higher than the FMR, then Section 8 tenants might struggle to find housing, reducing the pool of potential residents. However, since the market rent is below the FMR, this scenario does not apply.

Step 3: Is the rental demand strong enough to support investment?

Rental Demand Strong: Given that 49.1% of households are renters, there is a significant portion of the population that relies on rental housing. This high percentage indicates a robust rental market. Furthermore, the Day DOM (Days on Market) being listed as N/A suggests either that data is not available or that listings move quickly. In either case, these factors point towards a healthy demand for rentals.
Rental Demand Weak: If the rental demand were weak, it would mean that the percentage of renters is low or that properties take a long time to rent out. However, with 49.1% of households renting, and the lack of Days on Market data indicating quick turnover, this branch does not apply.

Conclusion: If the FMR of $970 covers the debt service on a property valued at $58,713 and the market rent is below the FMR, the strong rental demand indicated by the 49.1% of households being renters makes ZIP 35207 a viable option for Section 8 investment. The key is ensuring that the FMR adequately supports your financial requirements before making a purchase.

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.