Section 8 Fair Market Rent (FMR) for ZIP 36109 - 2027

Location: Montgomery, AL | Metro: Montgomery, AL MSA

Investment Score for ZIP 36109

Monthly Rent (2BR)

$1,180

Median Price (2BR)

$107,159

1% Rule

1.1%

Annual Yield

13.21%

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,010
1 Bedroom	$1,030
2 Bedrooms	$1,180
3 Bedrooms	$1,510
4 Bedrooms	$1,750
5 Bedrooms	$2,030
6 Bedrooms	$2,274
7 Bedrooms	$2,456
8 Bedrooms	$2,579

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,180	$107,159	1.1%	B
3BR	$1,510	$147,457	1.02%	B
4BR	$1,750	$201,948	0.87%	C
5BR	$2,030	$262,032	0.77%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

23,581

Median Household Income

$59,193

Housing Units

11,288

Renter Percentage

35.1%

Occupancy Rate

89.2%

Renter Occupied

3,540

The Montgomery, AL area, specifically ZIP code 36109, is a vibrant neighborhood with a mix of residential and commercial properties, offering a variety of investment opportunities for landlords and small-portfolio investors. The housing market here reflects a balance between affordability and demand, making it a strategic location for real estate investments.

Fair Market Rent (FMR): The FMR for ZIP 36109 in fiscal year 2024 is set at $1,130, indicating the average rental price that is considered fair for the area.
Zillow Observed Rental Index (ZORI): The ZORI for the area currently stands at $1,303, which is higher than the FMR, suggesting that the actual market rents exceed the government's fair market assessment.
Median Home Value: The median home value in ZIP 36109 is $153,285, which is relatively low compared to other areas in Alabama, making it accessible for potential buyers and investors.
Renter Share: With 35.1% of the population renting their homes, there is a significant demand for rental properties, providing ample opportunity for landlords.
Days on Market (DOM): Properties in this area typically stay on the market for about 32 days before they are sold, indicating a reasonably quick turnover rate for sales.
Median Income: The median household income in ZIP 36109 is $59,193, which suggests that residents have sufficient financial capacity to support rental costs up to the ZORI level.

In summary, ZIP 36109 presents a favorable market for real estate investors due to its strong rental demand, relatively low median home values, and a median income that supports the current rental rates. The discrepancy between the ZORI and FMR indicates a potential for higher returns on rental investments. However, the quick turnover rate for property sales also means that flipping homes could be a viable strategy alongside long-term rentals.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.