Location: Gadsden, AL | Metro: Birmingham-Hoover, AL HUD Metro FMR Area
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 | $810 |
| 1 Bedroom | $1,000 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,480 |
| 4 Bedrooms | $1,680 |
| 5 Bedrooms | $1,949 |
| 6 Bedrooms | $2,183 |
| 7 Bedrooms | $2,358 |
| 8 Bedrooms | $2,476 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,480 | $256,755 | 0.58% | F |
| 4BR | $1,680 | $356,278 | 0.47% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 35906 are straightforward. The SAFMR (Standard Area Fair Market Rent) for a two-bedroom apartment is set at $1,110 for fiscal year 2024. This rate is specifically tailored for this ZIP code, ensuring it reflects the local rental market conditions accurately.
Local market rents, according to the Census ACS, run at an average of $1,048. This means that the SAFMR is slightly above the average market rent, providing landlords with a benchmark that is favorable compared to typical market rates.
A Section 8 voucher does not cover the entire rent amount; rather, it subsidizes a portion of the rent based on the tenant's income. The voucher program requires tenants to contribute 30% of their adjusted monthly income toward the rent. Additionally, there are utility allowances that vary depending on the size of the unit and the region. For a two-bedroom apartment in ZIP 35906, the utility allowance typically ranges between $300 to $400 per month.
To walk through a typical scenario, let’s assume a tenant has an adjusted monthly income of $1,500. Thirty percent of this income would be $450, which the tenant would pay directly to the landlord. The voucher would then cover the remaining rent up to the SAFMR of $1,110. Therefore, the voucher would reimburse the landlord with $660 ($1,110 - $450).
In addition to the rent subsidy, landlords receive the utility allowance. If we take an average utility allowance of $350, the total reimbursement to the landlord would be $1,010 ($660 + $350).
This reimbursement figure is important because it shows the landlord how much they can expect to receive from the voucher program plus the utility allowance. In ZIP 35906, where the market rent is $1,048, landlords using Section 8 vouchers would face a slight shortfall of $38 per month if they charge the market rate. However, landlords can adjust their rent to align closely with the SAFMR to ensure they do not lose out financially.
Landlords should also consider that the SAFMR is periodically adjusted, so staying informed about these changes can help manage expectations and financial planning. Furthermore, the SAFMR serves as a cap, meaning that even if the market rent increases, the voucher payment will not exceed the SAFMR unless it is updated.
In summary, while the SAFMR for ZIP 35906 is higher than the local market rent, landlords using Section 8 vouchers must account for the tenant's contribution and the utility allowance when calculating their net income. With a market rent of $1,048, landlords can expect a reimbursement gap of $38 per month, but strategic pricing can mitigate this effect.
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.