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 | $1,450 |
| 1 Bedroom | $1,550 |
| 2 Bedrooms | $1,690 |
| 3 Bedrooms | $2,120 |
| 4 Bedrooms | $2,390 |
| 5 Bedrooms | $2,772 |
| 6 Bedrooms | $3,105 |
| 7 Bedrooms | $3,353 |
| 8 Bedrooms | $3,521 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,550 | $100,110 | 1.55% | A+ |
| 2BR | $1,690 | $283,003 | 0.6% | F |
| 3BR | $2,120 | $525,438 | 0.4% | F |
| 4BR | $2,390 | $788,359 | 0.3% | F |
| 5BR | $2,772 | $1,120,363 | 0.25% | F |
U.S. Census Bureau data (2024)
The potential risks for a Section 8 landlord investing in ZIP code 35209 in Homewood, AL, include tenant turnover and vacancy exposure. The market rent for properties in this area is $1,486, which is slightly below the Fair Market Rent (FMR) of $1,500 set for FY 2024. This difference can lead to higher tenant turnover as some tenants might seek better deals outside the program. Additionally, the average Days on Market (DOM) is 12 days, indicating that properties can remain vacant longer than desirable, especially if there are delays in the voucher process.
Deferred maintenance is another significant concern, particularly given the typical home value of $525,191 and the median income of $71,439. These figures suggest that homeowners in the area may struggle to keep up with maintenance costs, which can be a burden for landlords who must ensure their properties meet housing quality standards. The financial strain on residents could also result in a higher likelihood of non-payment or late payment of rent, further complicating the management of rental properties.
However, these risks are mitigated by the high proportion of renters in the area. With a 51.5% renter share, there is a strong demand for rental properties, including those participating in the Section 8 program. High renter density typically translates into a robust pool of potential tenants, reducing the impact of any individual tenant issues and increasing the chances of finding qualified voucher holders quickly.
In conclusion, the overall risk for a first-time Section 8 landlord in ZIP 35209 is moderate.
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.