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 | $910 |
| 1 Bedroom | $910 |
| 2 Bedrooms | $1,090 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,430 |
| 5 Bedrooms | $1,659 |
| 6 Bedrooms | $1,858 |
| 7 Bedrooms | $2,007 |
| 8 Bedrooms | $2,107 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,370 | $230,680 | 0.59% | F |
| 4BR | $1,430 | $285,340 | 0.5% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,200 for ZIP 35490 can cover the mortgage on a $211,597 home. To address this, let's consider recent mortgage rates. According to Zillow, homes in ZIP 35490 are currently priced around $276,400 for a typical 3-bedroom, 2-bath house. However, the median price of a home in ZIP 35490 is lower than the example given. Assuming a median-priced home of $211,597 and a typical mortgage rate of 5%, the monthly mortgage payment would be approximately $1,140. Thus, the FMR of $1,200 is sufficient to cover the mortgage.
The second objection could be regarding the renter demand at 11.7%. An analysis of the rental market in ZIP 35490 reveals that about 27.8% of housing units are renter-occupied, indicating a significant portion of the market relies on rentals. Furthermore, the median rental payment in this area is $936 per month. With a rental vacancy rate of only 1.9%, it's clear that there is strong demand for rental properties. Even if the actual percentage is 11.7%, this still represents a substantial number of potential tenants given the size of the housing stock.
Finally, an investor might wonder if housing vouchers will keep pace with the market rent of $1,700. Unfortunately, the data does not provide specific voucher utilization rates for ZIP 35490. However, it's important to note that voucher programs aim to ensure affordability for low-income households. While market rents may fluctuate, voucher amounts are adjusted periodically to reflect changes in the cost of living. Therefore, while there is no guarantee, historical trends suggest that voucher amounts will likely remain competitive with market rents.
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.