Location: Tuscaloosa, AL | Metro: Tuscaloosa, 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 | $920 |
| 1 Bedroom | $930 |
| 2 Bedrooms | $1,110 |
| 3 Bedrooms | $1,400 |
| 4 Bedrooms | $1,460 |
| 5 Bedrooms | $1,694 |
| 6 Bedrooms | $1,897 |
| 7 Bedrooms | $2,049 |
| 8 Bedrooms | $2,151 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,400 | $271,898 | 0.51% | F |
| 4BR | $1,460 | $336,587 | 0.43% | F |
| 5BR | $1,694 | $373,709 | 0.45% | F |
U.S. Census Bureau data (2024)
In ZIP code 35473, the Section 8 program operates under specific economic guidelines that affect both landlords and tenants. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP code for fiscal year 2024 is set at $1120. This figure represents the maximum amount that the government will pay toward the rental costs of a Section 8 voucher holder in this specific area.
The local market rent for a two-bedroom unit, as measured by ZORI (Zillow Observed Rent Index), stands at $1,783. This discrepancy between the SAFMR and the ZORI highlights the financial dynamics landlords face when participating in the Section 8 program. When a tenant uses a Section 8 voucher, they are responsible for paying a portion of the rent themselves, typically around 30% of their income. In addition to the rent subsidy, there is also an allowance for utilities which varies based on the size of the apartment and the region.
To clarify the payment process, let's break it down step-by-step. If a landlord rents out a two-bedroom unit at the market rate of $1,783, the government would cover up to $1120 of that cost. The remaining balance must be paid by the tenant. For instance, if the tenant’s income is such that their 30% contribution equals $500, then the total rent covered by the voucher and the tenant would be $1620 ($1120 + $500).
The utility allowance for a two-bedroom apartment in ZIP 35473 is not explicitly stated in the provided data but is usually calculated separately and added to the rent subsidy. This allowance can vary significantly, so landlords should consult the HUD (Department of Housing and Urban Development) for precise amounts applicable to their location.
Given these figures, the reimbursement gap for a landlord renting a two-bedroom unit at the market rate is $163 ($1,783 - $1620). This means that landlords would receive $163 less than the market rate per month if they were to rent to a Section 8 tenant at the current market price. Conversely, if the landlord sets the rent below the market rate, say at $1,500, the reimbursement gap would shrink to $380 ($1,500 - $1120), making the property more attractive to Section 8 tenants while still providing a reasonable return to the landlord.
Landlords should weigh the benefits of steady government-backed payments against the potential for a lower overall rental income. It's important to note that the SAFMR is designed to reflect the average fair market rent for the specific ZIP code, ensuring that the subsidy is appropriate for the local housing market conditions.
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.