Location: Huntsville, AL | Metro: Huntsville, 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 | $1,680 |
| 1 Bedroom | $1,760 |
| 2 Bedrooms | $2,010 |
| 3 Bedrooms | $2,600 |
| 4 Bedrooms | $3,360 |
| 5 Bedrooms | $3,898 |
| 6 Bedrooms | $4,366 |
| 7 Bedrooms | $4,715 |
| 8 Bedrooms | $4,951 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,600 | $335,559 | 0.77% | D |
| 4BR | $3,360 | $501,304 | 0.67% | D |
| 5BR | $3,898 | $647,497 | 0.6% | D |
U.S. Census Bureau data (2024)
The Section 8 market analysis for ZIP code 35763 in Huntsville, AL MSA reveals a favorable environment for landlords and small-portfolio investors. The HUD Fair Market Rent (FMR) for FY 2024 is set at $1,870, which is higher than the market rent of $1,728 as indicated by ZORI (Zillow Observed Rent Index).
This means that voucher tenants will generally cashflow at the FMR rate, providing a positive financial benefit for property owners. To further analyze the investment potential, consider the median home value in the area, which stands at $437,037. Using this figure, we can calculate the rent-to-price ratio, which comes out to approximately 0.42%. This ratio suggests that rental income represents a modest percentage of the home's total value, indicating that property appreciation could be a significant factor in overall returns.
The median Days on Market (DOM) is 34 days, and the price-cut share is 0.2%, both of which point towards a robust buyer's market. However, these metrics have limited impact on the decision between renting and buying, as they primarily affect the sales process rather than rental dynamics. In the context of rental properties, the key takeaway is the positive cash flow generated by the discrepancy between the HUD FMR and the actual market rent.
The strongest investor angle in ZIP 35763 is cashflow, given the favorable rates for voucher tenants compared to the prevailing market rents.
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.