Location: Decatur, AL | Metro: Decatur, AL MSA
| Unit Size | Monthly FMR |
|---|---|
| Studio | $750 |
| 1 Bedroom | $750 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,180 |
| 4 Bedrooms | $1,520 |
| 5 Bedrooms | $1,763 |
| 6 Bedrooms | $1,975 |
| 7 Bedrooms | $2,133 |
| 8 Bedrooms | $2,240 |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 35618 might raise several valid concerns regarding the feasibility of investing in properties there, particularly under the Section 8 program. Let's address these points directly with the available data.
Objection 1: Will Fair Market Rent (FMR) of $860 for the fiscal year 2024 cover the mortgage on a $154,178 home?
The FMR of $860 is the maximum amount that a landlord can charge for a rental property under the Section 8 program. To determine if this will cover the mortgage, we need to calculate the potential monthly mortgage payment. Assuming a 30-year fixed-rate mortgage at an average interest rate of 4%, the monthly mortgage payment on a $154,178 home would be approximately $730. This means that the FMR of $860 would indeed cover the mortgage payment, leaving a buffer of around $130 per month for maintenance, taxes, and other expenses. However, it's important to note that the actual interest rate and terms of the mortgage could vary, affecting the final monthly payment.
Objection 2: Is there enough renter demand at 30.0%?
The 30.0% figure represents the percentage of households that are renters in ZIP 35618. While this indicates a moderate level of rental demand, it's crucial to understand how competitive the rental market is and whether there is sufficient demand for Section 8 tenants specifically. The data does not provide a breakdown of the rental market dynamics or the proportion of renters who are eligible for Section 8. Therefore, while the overall rental demand appears to be present, the specific demand for Section 8 housing cannot be fully assessed without additional information.
Objection 3: Will vouchers keep pace with market rents of $533?
The market rent of $533 is significantly lower than the FMR of $860, which suggests that the voucher amounts should be sufficient to cover the market rent. However, the question remains whether the voucher amounts will increase in line with any future market rent hikes. The data does not specify how often or by what margin voucher amounts adjust. Typically, voucher amounts are reviewed annually, but the extent to which they match increases in market rents is uncertain. Landlords should monitor local housing authority announcements and trends in market rents to ensure continued profitability.
In summary, the data shows that the FMR of $860 is likely to cover the mortgage on a $154,178 home, and the market rent of $533 is below the FMR threshold. However, the adequacy of renter demand and the long-term alignment of voucher amounts with market rent increases require further investigation beyond the provided data.
Data Sources: FMR data from HUD (2027). 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.