Location: Birmingham-Hoover, AL | Metro: Birmingham-Hoover, AL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $790 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $950 |
| 3 Bedrooms | $1,170 |
| 4 Bedrooms | $1,350 |
| 5 Bedrooms | $1,566 |
| 6 Bedrooms | $1,754 |
| 7 Bedrooms | $1,894 |
| 8 Bedrooms | $1,989 |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 35987 are governed by the SAFMR (Small Area Fair Market Rent) which is specifically tailored for this ZIP code. For a two-bedroom apartment, the SAFMR for FY 2024 is set at $1110. This figure represents the maximum amount that the housing authority will pay to landlords who accept Section 8 vouchers.
However, it's important to understand that the actual reimbursement to landlords is influenced by both the tenant's portion of the rent and utility allowances. The local market rent, as reported by the Census ACS, stands at $721 for a two-bedroom unit. This lower market rent can impact the amount the tenant contributes towards their share of the rent.
The voucher system works such that the tenant is expected to pay approximately 30% of their adjusted income towards rent. The remaining balance up to the SAFMR of $1110 is then covered by the housing assistance payment (HAP) from the government. Additionally, there are utility allowances that vary but are typically around $200 per month for a two-bedroom apartment. These allowances are also included in the total reimbursement package.
To illustrate, if a tenant's portion is $721 and the utility allowance is $200, the total reimbursement would be $921 ($721 + $200). In this case, the landlord would receive $921 from the government and the tenant, totaling less than the SAFMR of $1110. Therefore, the landlord would have a reimbursement gap of $189 ($1110 - $921).
The SAFMR being set at the ZIP level means that the rate is specifically designed for this particular ZIP code, reflecting the unique economic conditions of the area. Landlords should be aware that while the SAFMR provides a cap on the rent, the actual amount received can be significantly lower due to the combination of the tenant's contribution and utility allowances.
In summary, for a two-bedroom rental property in ZIP 35987, landlords can expect a reimbursement gap of $189 per month, assuming the tenant's portion is at the local market rent of $721 and utility allowances are around $200. This gap must be considered when deciding whether to participate in the Section 8 program, as it directly impacts the net income from the rental property.
Data Sources: FMR data from HUD (2027). 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.