Section 8 Fair Market Rent (FMR) for ZIP 36112 - 2027

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

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,030
1 Bedroom	$1,050
2 Bedrooms	$1,200
3 Bedrooms	$1,540
4 Bedrooms	$1,860
5 Bedrooms	$2,158
6 Bedrooms	$2,417
7 Bedrooms	$2,610
8 Bedrooms	$2,741

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

633

Median Household Income

$N/A

Housing Units

Renter Percentage

53.8%

Occupancy Rate

100.0%

Renter Occupied

To determine if you should invest in ZIP code 36112 for Section 8 properties, follow this decision tree:

Does the Fair Market Rent (FMR) of $1580 cover your debt service?
- If yes: Proceed to the next question.
- If no: Do not buy here. The FMR does not provide sufficient income to meet your financial obligations.
Is the market rent of $1,125 above, at, or below the FMR?
- If above: This indicates strong rental demand and potential for higher returns beyond just Section 8 subsidies.
- If at or below: There's less incentive for non-Section 8 tenants, meaning you'll be more reliant on the program.
Are 53.8% of residents renters, and is the days on market (DOM) sufficient to ensure demand?
- If yes: There is significant rental demand in the area. With over half of the residents renting, and assuming the DOM is reasonable, you can expect steady tenant interest.
- If no: Consider other areas. If the percentage of renters is lower or the DOM is too high, indicating slow turnover, there might not be enough demand to support your investment.

The Fair Market Rent set by HUD for ZIP 36112 in fiscal year 2024 is $1580. This figure is crucial because it represents the maximum amount that a Section 8 voucher holder can pay for rent. For a landlord, the first step is ensuring that this amount can cover the mortgage payments, taxes, insurance, and maintenance costs associated with the property. If the $1580 FMR does not clear these expenses, investing in this ZIP code would not be financially viable.

The second consideration is comparing the FMR to the actual market rent. In ZIP 36112, the market rent is $1,125 according to the Census ACS. Since this is below the FMR, it suggests that there could be a gap between what tenants can afford with their vouchers and what landlords might charge. This scenario typically means that landlords will need to rely more heavily on Section 8 subsidies to fill vacancies, which can be a stable but predictable income source.

Lastly, evaluate the rental market's health by looking at the percentage of renters and the DOM. With 53.8% of residents being renters, there is a substantial portion of the population already engaged in the rental market. However, the DOM needs to be analyzed to confirm that properties are turning over quickly enough to sustain an investment. A low DOM indicates high demand, while a high DOM could signal difficulties in filling units.

In summary, if the FMR of $1580 clears your debt service, the market rent of $1,125 is below the FMR, and the 53.8% of renters combined with a reasonable DOM suggests sufficient demand, then the answer is yes. Investing in ZIP 36112 for Section 8 properties can be a sound strategy given the data points provided.

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.