Location: Daphne-Fairhope-Foley, AL | Metro: Daphne-Fairhope-Foley, AL MSA
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 | $990 |
| 1 Bedroom | $1,080 |
| 2 Bedrooms | $1,220 |
| 3 Bedrooms | $1,530 |
| 4 Bedrooms | $1,960 |
| 5 Bedrooms | $2,274 |
| 6 Bedrooms | $2,547 |
| 7 Bedrooms | $2,751 |
| 8 Bedrooms | $2,889 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,220 | $151,888 | 0.8% | C |
| 3BR | $1,530 | $226,183 | 0.68% | D |
| 4BR | $1,960 | $322,580 | 0.61% | D |
| 5BR | $2,274 | $432,227 | 0.53% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 36507, centered around Bay Minette, AL, highlights a significant financial opportunity for landlords and small-portfolio investors. The Fair Market Rent (FMR) for FY 2024 stands at $1090, while the Census ACS reported market rent at $983. This indicates that the FMR exceeds the market rent by $107, representing a 10.9% premium.
This gap makes voucher tenants a compelling option for yield-focused investments. Landlords can secure guaranteed rental income through the Housing Choice Voucher program, which pays up to the FMR level, ensuring a steady stream of revenue that outpaces local market rates. In an area where only 26.1% of residents are renters, attracting voucher holders can stabilize cash flow and reduce vacancy risks.
Beyond the immediate financial benefits, the higher FMR also addresses a critical issue: the cost of housing for voucher tenants. Despite the median home value in Bay Minette being $213,990 and the median income at $50,120, many residents still struggle to find affordable housing. By renting properties at the FMR, landlords contribute to the local economy by providing stable, affordable living spaces, which aligns with the needs of the community.
In conclusion, the $107 premium, or 10.9%, between the FMR and market rent in ZIP 36507 presents a clear yield play for landlords and investors. It allows them to capitalize on guaranteed income levels while addressing the affordability concerns of a significant portion of Bay Minette's population.
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.