Section 8 Fair Market Rent (FMR) for ZIP 35630 - 2027

Location: Florence-Muscle Shoals, AL | Metro: Florence-Muscle Shoals, AL MSA

Investment Score for ZIP 35630

Monthly Rent (2BR)

$1,130

Median Price (2BR)

$126,211

1% Rule

0.9%

Annual Yield

10.74%

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	$790
1 Bedroom	$870
2 Bedrooms	$1,130
3 Bedrooms	$1,400
4 Bedrooms	$1,490
5 Bedrooms	$1,728
6 Bedrooms	$1,935
7 Bedrooms	$2,090
8 Bedrooms	$2,195

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	$1,130	$126,211	0.9%	C
3BR	$1,400	$197,725	0.71%	D
4BR	$1,490	$299,630	0.5%	F
5BR	$1,728	$426,783	0.4%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

34,028

Median Household Income

$46,304

Housing Units

17,575

Renter Percentage

54.7%

Occupancy Rate

86.3%

Renter Occupied

8,294

To determine if you should buy in ZIP code 35630 (Florence, AL) for Section 8 purposes, follow these steps:

Step 1: Can the Fair Market Rent (FMR) of $930 cover the debt service on a property valued at $174,224?

If yes: Proceed to Step 2.
If no: Do not purchase in this area for Section 8. The FMR is insufficient to meet the financial obligations of the property.

Step 2: How does the Zillow Observed Rent Index (ZORI) of $1,318 compare to the FMR?

If ZORI is above FMR: This indicates that the market rent is higher than what is considered fair market value for Section 8 tenants. Landlords can potentially charge higher rents to non-Section 8 tenants, which may offset lower rental income from subsidized units. Proceed to Step 3.
If ZORI is at or below FMR: The market rent is not providing a significant premium over the FMR. This makes the investment less attractive unless other factors such as strong tenant demand or low vacancy rates justify the purchase. Consider carefully before proceeding to Step 3.

Step 3: Is there sufficient tenant demand? In Florence, AL, 54.7% of residents are renters, and the days on market (DOM) is 42 days.

If yes: With a substantial portion of residents being renters and a relatively short DOM indicating quick property turnover, there is likely enough demand to support a Section 8 investment. Purchase in this area can be justified based on the data.
If no: If you find that the demand is not high enough, consider other areas where the percentage of renters is greater and the DOM is shorter. However, given the provided data, this scenario is unlikely as 54.7% renters and a 42-day DOM suggest a healthy rental market.

The decision to invest in ZIP 35630 for Section 8 properties hinges on the ability of the FMR to cover debt service and the comparative analysis between ZORI and FMR. Given the data, if the FMR of $930 clears the debt service on a property valued at $174,224 and the market rent ($1,318) is higher than the FMR, then the answer is yes, you should buy here for Section 8. The rental market appears to have sufficient demand to sustain such an investment.

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.