Location: Covington County, AL | Metro: Dothan, AL HUD Metro FMR Area
| Unit Size | Monthly FMR |
|---|---|
| Studio | $760 |
| 1 Bedroom | $770 |
| 2 Bedrooms | $980 |
| 3 Bedrooms | $1,260 |
| 4 Bedrooms | $1,640 |
| 5 Bedrooms | $1,902 |
| 6 Bedrooms | $2,130 |
| 7 Bedrooms | $2,300 |
| 8 Bedrooms | $2,415 |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 36442 are straightforward. For a two-bedroom apartment, the SAFMR (Small Area Fair Market Rent) is set at $860 for fiscal year 2024. This figure is specific to this ZIP code, meaning it's tailored to reflect the local rental market conditions accurately.
In comparison, the local market rent for a two-bedroom unit in ZIP 36442 is reported to be $747 based on Census ACS data. This indicates that the SAFMR is higher than the average market rent, which can be beneficial for landlords participating in the program.
A landlord might wonder how much a voucher will actually cover. The voucher system works by covering the difference between the tenant's portion and the total rent. The tenant typically pays 30% of their adjusted income towards rent. If we assume an average household income that aligns with the typical market dynamics, the tenant's portion would be calculated accordingly.
For instance, if a tenant's income is $2,000 per month, they would pay $600 (30% of $2,000) towards rent. The remaining amount up to the SAFMR would be covered by the housing authority, but not exceeding the $860 limit. In this case, the housing authority would pay $260 ($860 - $600).
Utility allowances are also factored into the voucher payment. These allowances vary by location and can add additional support to the tenant’s monthly budget, though they do not directly affect the base rent reimbursement.
Given the SAFMR of $860 and the local market rent of $747, landlords in ZIP 36442 can expect a slight surplus when renting to tenants with vouchers. The surplus is $113 per month, representing the difference between the SAFMR and the market rent. This means that even if the housing authority reimburses only up to the SAFMR, landlords are still likely to receive a rent amount slightly above the average market price.
To summarize, landlords in ZIP 36442 who participate in the Section 8 program can expect a reimbursement structure where the housing authority covers the gap between the tenant's 30% contribution and the SAFMR, ensuring a stable and predictable income source. With the SAFMR set higher than the local market rent, there is a potential for a small monthly surplus, making the program economically viable for landlords.
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.