Location: Escambia County, AL | Metro: Escambia 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 | $810 |
| 1 Bedroom | $850 |
| 2 Bedrooms | $1,040 |
| 3 Bedrooms | $1,270 |
| 4 Bedrooms | $1,710 |
| 5 Bedrooms | $1,984 |
| 6 Bedrooms | $2,222 |
| 7 Bedrooms | $2,400 |
| 8 Bedrooms | $2,520 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,270 | $176,687 | 0.72% | D |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap rate for ZIP code 36441 reveals a nuanced picture when comparing federal market rent (FMR) figures to market rent data. With an annualized 2BR FMR set at $850 for fiscal year 2026, the implied gross yield for a property in this area would be approximately 6.06%. This calculation is derived from taking the annualized FMR ($850 * 12 months = $10,200) and dividing it by the median home value ($140,212).
In contrast, using the market rent figure of $832 based on Census ACS data, the implied gross yield drops slightly to 5.92%. This is calculated by multiplying the monthly market rent ($832) by 12 months to get an annual rental income of $9,984, then dividing that by the median home value.
Given the 25.4% renter density in ZIP 36441, it's important to consider the local market dynamics. A lower renter density suggests a smaller pool of potential tenants, which could impact vacancy rates and the stability of rental income. However, the N/A-day DOM (days on market) indicates incomplete data regarding how quickly properties are rented out, making it difficult to assess the speed at which units turn over.
Between the two scenarios, the FMR-based gross yield of 6.06% appears more realistic. Federal guidelines tend to reflect a broader safety net for tenants, ensuring a steady flow of rental income even in areas with lower renter density. The market rent scenario, while close, does not account for the additional security provided by the Section 8 program, which often leads to lower vacancy rates and more predictable cash flows.
Investors should note that these gross yields do not include operating expenses, financing costs, or other factors that would affect the net operating income (NOI). However, the difference between the two yields, while small, can be significant when scaled across multiple properties. For a landlord or small-portfolio investor considering Section 8 participation in ZIP 36441, the higher gross yield of 6.06% based on FMR is a more reliable benchmark.
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.