Location: Marshall County, 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 | $750 |
| 1 Bedroom | $810 |
| 2 Bedrooms | $990 |
| 3 Bedrooms | $1,370 |
| 4 Bedrooms | $1,380 |
| 5 Bedrooms | $1,601 |
| 6 Bedrooms | $1,793 |
| 7 Bedrooms | $1,936 |
| 8 Bedrooms | $2,033 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $990 | $233,034 | 0.42% | F |
| 3BR | $1,370 | $308,195 | 0.44% | F |
| 4BR | $1,380 | $480,320 | 0.29% | F |
| 5BR | $1,601 | $743,670 | 0.22% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering Guntersville, AL (ZIP 35976) for Section 8 investments might have several concerns, which can be addressed using available data.
Objection 1: Will FMR $970 (zip FY 2024) cover the mortgage on a $304,378 home?
The Fair Market Rent (FMR) for ZIP 35976 is set at $970 for fiscal year 2024. This figure represents the average monthly rent that a landlord can expect from a tenant participating in the Section 8 program. To determine if this amount will cover the mortgage, we must calculate the monthly mortgage payment based on the median home price of $304,378. Assuming a typical 30-year fixed-rate mortgage at an interest rate of 4%, the monthly principal and interest payment would be approximately $1,460. Clearly, the FMR of $970 does not cover this mortgage payment alone. However, it's important to note that this analysis assumes no down payment and does not account for potential tax benefits or subsidies that might reduce the effective cost of ownership.
Objection 2: Is there enough renter demand at 25.0%?
The rental demand in Guntersville is estimated at 25.0%. While this percentage is relatively low, it suggests that a quarter of the housing units are rented out, indicating a steady demand. However, the data does not specify the number of units available or the number of renters actively seeking housing. To fully assess demand, one would need additional information such as the vacancy rate and the number of new tenants moving into the area annually. The 25.0% figure alone does not provide a complete picture but does suggest a niche market for rental properties.
Objection 3: Will vouchers keep pace with $849 market rents?
The Section 8 voucher amount is designed to cover a significant portion of the market rent, which in Guntersville is $849 per month. Historically, voucher amounts have been adjusted to reflect changes in the market, although the exact timing and extent of these adjustments can vary. Given that the FMR is slightly higher at $970, it indicates that vouchers should be sufficient to cover the $849 market rent. However, the data does not provide insight into future adjustments or the rate of inflation, which could affect both market rents and voucher amounts over time. It's crucial for investors to monitor these trends closely.
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.