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 | $1,300 |
| 1 Bedroom | $1,370 |
| 2 Bedrooms | $1,560 |
| 3 Bedrooms | $2,020 |
| 4 Bedrooms | $2,610 |
| 5 Bedrooms | $3,028 |
| 6 Bedrooms | $3,391 |
| 7 Bedrooms | $3,662 |
| 8 Bedrooms | $3,845 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,560 | $223,708 | 0.7% | D |
| 3BR | $2,020 | $341,324 | 0.59% | F |
| 4BR | $2,610 | $417,967 | 0.62% | D |
| 5BR | $3,028 | $527,149 | 0.57% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 35806, which is part of Huntsville, Alabama, and Madison County, revolve around the SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment, set at $1460 for fiscal year 2024. This SAFMR figure is specifically tailored for this ZIP code, reflecting the localized housing costs. In contrast, the local market rent, measured by ZORI (Zillow Observed Rent Index), stands at $1,307.
A landlord participating in the Section 8 program should understand how the reimbursement works. The Housing Choice Voucher Program sets the amount it will reimburse based on the SAFMR. However, the actual payment received by landlords includes both the tenant's contribution and any utility allowances. Tenants are generally required to pay 30% of their adjusted income toward rent.
To illustrate, if a tenant has an adjusted monthly income of $1,000, they would contribute $300 towards rent. The remaining balance, up to the SAFMR limit, is covered by the government. For ZIP 35806, this means that the government could cover up to $1,160 ($1,460 - $300) of the rent for a two-bedroom unit. Utility allowances vary but typically add another $100-$200 to the total reimbursement.
In ZIP 35806, landlords can expect the total reimbursement to be slightly above the local market rent. Given the SAFMR of $1460 and assuming a utility allowance of $150, the total reimbursement would be $1,310 for a two-bedroom unit. This is just above the ZORI of $1,307, indicating a slight surplus for landlords who participate in the program.
However, it's important to note that the SAFMR acts as a ceiling. If the market rent exceeds $1460, the landlord will not receive additional funds from the government, leading to a potential reimbursement gap. Conversely, if the market rent is below the SAFMR, landlords might see a surplus, as the government pays closer to the SAFMR rather than the lower market rates.
In summary, for a two-bedroom apartment in ZIP 35806, the typical reimbursement gap or surplus leans towards a surplus of about $3-$53 per month, depending on the exact utility allowance and tenant's contribution. Landlords should consider these factors when deciding whether to participate in the Section 8 program.
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.