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 | $930 |
| 1 Bedroom | $1,030 |
| 2 Bedrooms | $1,180 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,900 |
| 5 Bedrooms | $2,204 |
| 6 Bedrooms | $2,468 |
| 7 Bedrooms | $2,665 |
| 8 Bedrooms | $2,798 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,180 | $145,406 | 0.81% | C |
| 3BR | $1,530 | $177,662 | 0.86% | C |
| 4BR | $1,900 | $236,859 | 0.8% | C |
U.S. Census Bureau data (2024)
ZIP code 35805, located in Huntsville, AL within the Huntsville, AL MSA, is best suited as a cash-flow anchor in a Section 8 portfolio strategy. This classification is based on the significant spread between the Fair Market Rent (FMR) and the market rent for the area. The FMR for ZIP 35805 in fiscal year 2024 is set at $970, while the average market rent stands at $1,295. This $325 difference per month provides a solid cushion for cash flow stability.
The median home value in ZIP 35805 is $157,931, which is relatively low compared to many other areas. This makes it easier for landlords to purchase properties without a large initial investment, further enhancing the cash-flow potential. The lower median income of $35,385 indicates that tenants in this area will likely be seeking affordable housing options, making Section 8 vouchers an attractive choice for them. This aligns well with the lower FMR, ensuring that there is a steady demand for rental units at the subsidized rate.
While the 0.3% price-cut share and the lack of data on days on market (DOM) suggest limited room for price negotiation and potentially quick sales, these factors do not outweigh the benefits of the cash-flow anchor status. The 59.4% renter share might indicate some diversification opportunity, but given the strong cash-flow characteristics, this ZIP code is primarily positioned to provide stable, predictable income.
To summarize, ZIP 35805 serves as a reliable cash-flow anchor due to the substantial gap between the FMR and market rents, the low median home value, and the high demand for affordable housing among the local population. These factors ensure that landlords can maintain consistent cash flows even when facing economic uncertainties.
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.