Location: Mobile, AL | Metro: Mobile, 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 | $960 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,170 |
| 3 Bedrooms | $1,510 |
| 4 Bedrooms | $1,610 |
| 5 Bedrooms | $1,868 |
| 6 Bedrooms | $2,092 |
| 7 Bedrooms | $2,259 |
| 8 Bedrooms | $2,372 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,170 | $139,518 | 0.84% | C |
| 3BR | $1,510 | $217,041 | 0.7% | D |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 36523 presents a unique opportunity for landlords and small-portfolio investors due to the disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 36523 in fiscal year 2024 is set at $1120, while the Census ACS reports the market rent to be $1157. This creates a gap of $37, or approximately 3.3%, between what voucher tenants can pay and the open-market rent.
Given that the FMR is lower than the market rent, landlords must consider the cost implications of accepting housing vouchers. Voucher tenants will pay only up to the FMR rate, which is $1120, leaving the landlord to accept a slightly lower rent compared to the open-market rate. However, this scenario also mitigates risks associated with non-payment and delinquency, as the federal government guarantees payment up to the FMR amount.
In Coden, Alabama, where 20.7% of residents are renters, the median home value stands at $153,332, and the median income is $61,607. These figures suggest that the rental market is relatively stable, with a significant portion of the population relying on rentals. Accepting Section 8 tenants can help fill vacancies in properties that might otherwise struggle to compete with higher market rents, ensuring a steady cash flow.
Moreover, the guaranteed payment structure of Section 8 can provide financial security and predictability for landlords, especially when compared to the volatility of the open-market rental sector. While the $37 difference per month may seem minor, it can add up over time and affect overall yields. Landlords should weigh this against the benefits of reduced vacancy periods and the stability provided by government-backed payments.
For small-portfolio investors, the decision to participate in the Section 8 program should be made with an understanding of the local rental dynamics. In Coden, the lower FMR could serve as a barrier to entry for some potential tenants, but it also ensures that those who do qualify are likely to have a strong need for stable housing, reducing the likelihood of tenant turnover and associated costs.
Investors and landlords in ZIP 36523 should also consider the broader economic context. With a median income of $61,607, many residents may find it challenging to afford the $1157 market rent. By offering Section 8 units at the $1120 FMR, landlords can attract a reliable tenant base, potentially leading to longer tenancies and fewer vacant periods.
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.