Section 8 Fair Market Rent (FMR) for ZIP 35645 - 2027

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

Investment Score for ZIP 35645

Monthly Rent (2BR)

$1,260

Median Price (2BR)

$174,526

1% Rule

0.72%

Annual Yield

8.66%

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	$880
1 Bedroom	$970
2 Bedrooms	$1,260
3 Bedrooms	$1,570
4 Bedrooms	$1,660
5 Bedrooms	$1,926
6 Bedrooms	$2,157
7 Bedrooms	$2,330
8 Bedrooms	$2,447

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,260	$174,526	0.72%	D
3BR	$1,570	$276,051	0.57%	F
4BR	$1,660	$385,638	0.43%	F
5BR	$1,926	$530,940	0.36%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

13,960

Median Household Income

$87,958

Housing Units

6,002

Renter Percentage

14.6%

Occupancy Rate

90.3%

Renter Occupied

790

ZIP 35645, located in Killen, AL, within the Florence-Muscle Shoals, AL MSA metro area, serves as a solid cash-flow anchor for a Section 8 portfolio strategy. The Federal Market Rent (FMR) for the fiscal year 2024 is set at $900 for a one-bedroom unit, while the market rent stands at $1,000. This creates a $100 positive spread, which directly benefits landlords participating in the Section 8 program.

The median home value in ZIP 35645 is $268,400, indicating that property acquisition costs are relatively low compared to higher-priced markets. This makes it easier for investors to maintain a healthy cash flow even when accounting for Section 8 payment standards. The low cost of acquiring properties also means that there's less financial risk involved in purchasing properties in this area.

Cash Flow: With a $100 spread between FMR and market rent, landlords can rely on a stable source of income that closely mirrors market rates without the volatility often associated with non-subsidized rentals.
Appreciation: The 0.3% price-cut share and N/A-day Days on Market (DOM) suggest that the real estate market in this ZIP code is highly competitive, but not necessarily an area for significant appreciation plays. Landlords should focus on steady rental income rather than rapid property value increases.
Diversification: The 14.6% renter share and median income of $87,958 indicate a diverse tenant base with a mix of middle-income earners. This demographic helps ensure a consistent demand for rental units, making it suitable for diversifying a portfolio with properties that cater to both Section 8 tenants and other renters.

In summary, ZIP 35645 is best suited as a cash-flow anchor due to its favorable FMR-market rent spread and low median home values. While it offers some diversification benefits, the primary advantage lies in its ability to provide reliable and predictable rental income, crucial for landlords and small-portfolio investors looking to stabilize their financial performance.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.