Section 8 Fair Market Rent (FMR) for ZIP 35758 - 2027

Investment Score for ZIP 35758

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	$1,360
1 Bedroom	$1,430
2 Bedrooms	$1,630
3 Bedrooms	$2,110
4 Bedrooms	$2,720
5 Bedrooms	$3,155
6 Bedrooms	$3,534
7 Bedrooms	$3,817
8 Bedrooms	$4,008

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	$1,630	$209,543	0.78%	D
3BR	$2,110	$306,508	0.69%	D
4BR	$2,720	$464,004	0.59%	F
5BR	$3,155	$629,412	0.5%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 35758 (Madison, AL) #### Section 8 Voucher Dynamics In ZIP code 35758, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $1590 per month. This figure represents 16.3% of the median household income in the area, which stands at $117,380. The FMRs for other bedroom types are as follows: - 0BR: $1250 - 1BR: $1380 - 3BR: $2050 - 4BR: $2560 The FMRs are designed to reflect the average rent that a family can afford in a given area. However, the actual rental prices in Madison, AL, often exceed these figures. For instance, the Zillow median price for a two-bedroom home is $211,033, which translates to a monthly rent of approximately $1055 if we assume a standard rental yield of 5%. Given the Price-to-FMR ratio of 11.1x, it is clear that actual rents are significantly higher than the FMRs. This creates a challenging environment for Section 8 voucher holders, who are constrained by the FMR limits. In practice, finding a property that meets both the size requirements and the rent limit can be difficult. For example, a voucher holder looking for a two-bedroom apartment would need to find a unit renting for $1590 or less, which is below the market rate. This constraint could limit their options and potentially lead to longer search times and fewer available choices. #### Affordability & Renter Profile ZIP code 35758 has a population of 50,266, with 30.8% of residents being renters. This indicates a significant rental market presence. The occupancy rate of 95.5% suggests that the housing stock is nearly fully occupied, indicating a relatively tight market where demand is high relative to supply. Given the median household income of $117,380, the majority of residents likely have the financial means to afford homes outside of the FMR range. However, the 30.8% of renters may include a mix of lower-income families, young professionals, and others who might rely on assistance like Section 8 vouchers. These individuals face a particularly tough challenge due to the high actual rents compared to the FMRs. #### Investor Angle From an investor perspective, the ZIP code 35758 presents a mixed picture. The FMRs are significantly lower than the actual market rents, which means that properties rented at FMR levels will likely generate lower cash flows compared to those rented at market rates. For example, a two-bedroom apartment renting at the FMR of $1590 would generate a much lower cash flow than one renting at the market rate, which could be closer to $1055 per month based on the Zillow median price. However, the tight market conditions and high occupancy rates suggest that there is a strong demand for rental properties. Investors who can secure properties at or near the FMR levels may still find the market attractive, especially if they can manage costs effectively. The investment grade would depend on the ability to maintain properties at the FMR levels while covering operating expenses and generating a reasonable return. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high actual rents compared to FMRs, smaller units such as one-bedroom apartments may be more feasible for Section 8 voucher holders. The FMR for a one-bedroom unit is $1380, which is still below the likely market rent. Investors should consider acquiring or developing one-bedroom units to cater to this segment. 2. **Consider Location-Specific Opportunities**: While the overall market is tight, certain neighborhoods within ZIP 35758 may offer better opportunities for properties that can be rented at FMR levels. Investors should conduct detailed neighborhood analyses to identify areas where rents are closer to the FMRs. 3. **Develop Cost-Efficient Properties**: To ensure profitability at FMR levels, investors should focus on developing cost-efficient properties. This includes using energy-efficient materials, minimizing maintenance costs, and optimizing property management practices. For instance, a two-bedroom apartment renting at $1590 would need to cover all expenses and generate a profit margin that justifies the investment. #### Bottom Line For Section 8-focused investors, ZIP code 35758 presents a challenging but potentially rewarding market. The high actual rents compared to FMRs mean that cash flow will likely be lower than in markets where rents align more closely with FMRs. However, the strong demand and high occupancy rates indicate that there is a solid base of tenants willing to pay market rates. **Recommendation**: **Hold**. Investors should hold off on large-scale investments until they can identify specific opportunities where properties can be rented at or near FMR levels without sacrificing too much in terms of cash flow. Focusing on smaller units and carefully selecting locations within the ZIP code could provide a strategic advantage.

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.