Section 8 Fair Market Rent (FMR) for ZIP 35809 - 2027

FY 2027 Fair Market Rent Rates

The economics of Section 8 housing in ZIP code 35809, located in Huntsville County, Alabama, involve understanding the SAFMR (Small Area Fair Market Rent) and how it interacts with the local rental market. For fiscal year 2024, the SAFMR for a two-bedroom apartment in this specific ZIP code is set at $1280. This figure represents the maximum amount that a Section 8 voucher will cover for rent.

A crucial point for landlords to understand is that the voucher does not pay the entire rent. Tenants are required to contribute a portion of their income towards the rent, which is typically 30% of their adjusted monthly income. After the tenant's contribution is deducted, the remaining balance is what the voucher covers. For example, if a tenant's portion is $300, the voucher would then cover the difference up to $1280, which is $980 in this case.

In addition to the base rent, there are utility allowances that can be factored into the total reimbursement. These allowances vary based on the type of utilities included in the rent and the number of bedrooms. However, since the local market rent for ZIP 35809 is not available, we cannot directly compare the SAFMR to the actual market rates to determine the exact surplus or gap.

To illustrate the typical reimbursement process, let’s assume a tenant’s portion is $300 and the utility allowance is $100. The total reimbursement by the voucher program would be $1280 - $300 (tenant's share) = $980. If the utility allowance is $100, then the landlord receives an additional $100 for utilities, bringing the total reimbursement to $1080.

Given the SAFMR of $1280, landlords should set their rents carefully. If the market rent is higher than the SAFMR, the landlord will face a reimbursement gap, meaning they won't receive the full market rent from the voucher program. Conversely, if the market rent is lower, the landlord might see a surplus, receiving more than the market rate due to the combination of the tenant's payment and the voucher reimbursement.

Without specific local market rent data, we can conclude that landlords in ZIP 35809 should aim to keep their rent close to the SAFMR of $1280 to avoid a significant reimbursement gap. This ensures steady cash flow and minimizes financial risk associated with participating in the Section 8 program.

Data Sources: FMR data from HUD (2027).

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.