Location: Decatur, AL | Metro: Decatur, AL MSA
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 | $750 |
| 1 Bedroom | $760 |
| 2 Bedrooms | $930 |
| 3 Bedrooms | $1,200 |
| 4 Bedrooms | $1,530 |
| 5 Bedrooms | $1,775 |
| 6 Bedrooms | $1,988 |
| 7 Bedrooms | $2,147 |
| 8 Bedrooms | $2,254 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,200 | $261,692 | 0.46% | F |
| 4BR | $1,530 | $351,209 | 0.44% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering ZIP 35673 might raise several concerns regarding the feasibility of renting out a property under Section 8. Here, we address those concerns directly using available data.
The Fair Market Rent (FMR) of $860 in ZIP 35673 for fiscal year 2024 does not provide a complete picture of whether it can cover the mortgage on a $250,254 home. To determine this, one must consider the interest rate, loan term, and down payment. Assuming a typical 30-year fixed-rate mortgage with a 4% interest rate and a 20% down payment, the monthly principal and interest payment would be approximately $935. This exceeds the FMR by $75 per month. However, it's important to note that property taxes and insurance are additional costs that must be covered. These figures suggest that relying solely on the FMR might not fully cover the mortgage without supplementary income sources or a lower down payment, which could increase the overall risk.
The rental demand in ZIP 35673, measured by the percentage of households that rent, stands at 17.0%. This figure is relatively low compared to national averages, which can indicate a smaller pool of potential tenants. However, the demand for affordable housing remains strong, especially among those who qualify for Section 8 assistance. The key here is understanding the local rental market dynamics and the competition from other rental properties. A thorough analysis of the local rental vacancy rates and the number of households participating in the Section 8 program would provide a clearer indication of the actual demand.
The average market rent in ZIP 35673 is $741, slightly below the FMR but still a significant amount. Whether Section 8 vouchers will keep pace with these market rents depends on the rate of inflation and how quickly the voucher amounts adjust. Historically, voucher amounts have increased annually to match inflation, but the rate of increase has been slower than rent growth in many areas. In ZIP 35673, the data does not specify recent trends in voucher adjustments. Therefore, while current voucher amounts might cover the average market rent, future adjustments are uncertain. Investors should monitor both local rent increases and federal adjustments to ensure continued financial viability.
Investing in ZIP 35673 under Section 8 requires careful consideration of the above factors. While the FMR provides a baseline for rental income, it may not fully cover all expenses associated with owning a $250,254 home. The rental demand, though modest, is still present and should be evaluated in context with the local housing situation. Lastly, the ability of vouchers to keep up with market rents is subject to change and should be closely watched.
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.