Location: Marshall County, AL | Metro: DeKalb County, AL
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 | $700 |
| 1 Bedroom | $700 |
| 2 Bedrooms | $920 |
| 3 Bedrooms | $1,250 |
| 4 Bedrooms | $1,330 |
| 5 Bedrooms | $1,543 |
| 6 Bedrooms | $1,728 |
| 7 Bedrooms | $1,866 |
| 8 Bedrooms | $1,959 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,250 | $237,552 | 0.53% | F |
| 4BR | $1,330 | $346,572 | 0.38% | F |
U.S. Census Bureau data (2024)
A skeptical investor analyzing ZIP code 35951 might raise several valid concerns regarding the feasibility of investing in this area under the Section 8 program. Here's how the data addresses those points:
Objection 1: Will Fair Market Rent (FMR) of $780 cover the mortgage on a $221,485 home?
The Fair Market Rent (FMR) set by HUD for ZIP 35951 in fiscal year 2026 is $780 per month. To determine if this will cover the mortgage on a home priced at $221,485, we must consider the prevailing interest rates and typical mortgage terms. Assuming a 30-year fixed-rate mortgage with an average interest rate of 4%, the monthly payment would be approximately $1,070. This amount does not include property taxes, insurance, and maintenance costs. Therefore, the $780 FMR alone is insufficient to cover the mortgage on a home of this value.
Objection 2: Is there enough renter demand at 25.1%?
The rental demand in ZIP 35951 stands at 25.1%. This percentage indicates that a quarter of the housing units are rented out, which can be seen as relatively low compared to other areas. However, the demand for affordable housing remains steady, especially under programs like Section 8. The data does not provide a detailed breakdown of the rental market dynamics, such as vacancy rates or the number of renters who qualify for Section 8 assistance. Without this additional context, it's challenging to definitively conclude whether the 25.1% represents sufficient demand. It's important to note that Section 8 often serves as a safety net for tenants, ensuring a stable income stream for landlords.
Objection 3: Will vouchers keep pace with $758 market rents?
The market rent in ZIP 35951 is currently $758 per month. Given that the FMR is slightly higher at $780, landlords participating in the Section 8 program can expect their voucher payments to closely match the market rent. However, the long-term sustainability depends on HUD's ability to adjust the FMR in line with inflation and local market conditions. If HUD fails to keep the FMR updated, landlords could face shortfalls. The data does not offer projections for future adjustments, so this aspect requires monitoring over time.
In summary, while the FMR of $780 does not fully cover the mortgage on a $221,485 home, the consistent demand for affordable housing through Section 8 can provide a reliable tenant base. The rental demand at 25.1% suggests a niche market but lacks detail to make a robust assessment. Lastly, vouchers should align with the current market rent of $758, but ongoing vigilance is necessary to ensure they continue to do so in the future.
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.