Location: Gadsden, AL | Metro: Anniston-Oxford, 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 | $680 |
| 1 Bedroom | $780 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,170 |
| 4 Bedrooms | $1,310 |
| 5 Bedrooms | $1,520 |
| 6 Bedrooms | $1,702 |
| 7 Bedrooms | $1,838 |
| 8 Bedrooms | $1,930 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,170 | $232,622 | 0.5% | F |
| 4BR | $1,310 | $324,283 | 0.4% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP 35905 might have several concerns regarding the feasibility of investing in properties under the Section 8 program. Here, we address these concerns with the available data.
Objection 1: Will the Fair Market Rent (FMR) of $920 for ZIP 35905 in fiscal year 2024 cover the mortgage on a $206,792 home?
The FMR of $920 is a crucial figure for determining rental subsidies under Section 8. However, whether it sufficiently covers the mortgage depends on additional factors such as the interest rate and loan term. Assuming a standard 30-year fixed-rate mortgage at an average rate of 5%, the monthly mortgage payment for a $206,792 home would be approximately $1,116. This means that the FMR does not fully cover the mortgage payment, leaving a shortfall of around $196 per month. Landlords must consider this gap when assessing the profitability of renting to Section 8 tenants.
Objection 2: Is there enough renter demand at 18.9%?
The 18.9% represents the percentage of households that are renters in ZIP 35905. While this figure indicates a moderate level of rental demand, it does not provide insight into the specific demand for Section 8 housing. To truly gauge demand, one would need to look at the number of Section 8 vouchers available and the waiting list length for the area. The current data does not specify these details, so it's important for investors to research local housing authorities and their waiting lists to understand the potential occupancy rates for Section 8 properties.
Objection 3: Will vouchers keep pace with $829 market rents?
The market rent of $829 is slightly below the FMR of $920, indicating that the voucher amount is likely to cover the majority of market rents in ZIP 35905. However, the key concern here is whether the voucher amount will adjust over time to match increasing market rents. The data does not provide projections for future adjustments to voucher amounts. It is advisable for investors to monitor changes in the FMR and local housing authority policies to ensure long-term financial stability.
In conclusion, while ZIP 35905 presents opportunities for Section 8 investments, careful consideration of the financial gaps and thorough research into local rental dynamics are essential for making informed decisions. The provided data offers a starting point but requires supplementation with detailed local market analysis and ongoing monitoring of policy changes.
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.