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 | $1,340 |
| 1 Bedroom | $1,500 |
| 2 Bedrooms | $1,630 |
| 3 Bedrooms | $2,110 |
| 4 Bedrooms | $2,670 |
| 5 Bedrooms | $3,097 |
| 6 Bedrooms | $3,469 |
| 7 Bedrooms | $3,747 |
| 8 Bedrooms | $3,934 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,110 | $300,567 | 0.7% | D |
| 4BR | $2,670 | $428,370 | 0.62% | D |
| 5BR | $3,097 | $581,953 | 0.53% | F |
U.S. Census Bureau data (2024)
In ZIP code 36527, the economics of Section 8 housing involve understanding the balance between federal funding and local market conditions. The SAFMR (Section 8 Area Median Rent) for a two-bedroom apartment in this specific ZIP code is set at $1630 per month for the fiscal year 2024. However, the local market rent, as measured by ZORI (Zillow Observed Rent Index), is slightly lower at $1,570 per month.
A landlord participating in the Section 8 program should be aware of how the reimbursement works. The Housing Choice Voucher Program covers the difference between the tenant's contribution and the SAFMR. Tenants are generally required to contribute 30% of their adjusted income towards rent. For instance, if a tenant's adjusted income is $1,000, they would pay $300 toward the rent. The remaining amount, up to the SAFMR, is paid by the housing authority. In ZIP 36527, for a two-bedroom unit, the voucher would cover the rest of the SAFMR after subtracting the tenant's contribution.
Utility allowances can vary but are typically included in the SAFMR. This means that the total reimbursement to the landlord includes both rent and utilities, up to the $1630 limit. If the tenant's portion plus the utility allowance exceeds $1630, the landlord will not receive additional funds beyond the SAFMR cap.
To illustrate, consider a tenant contributing $300 toward rent. The housing authority would then pay the landlord the difference between the tenant's contribution and the SAFMR. Thus, the housing authority would pay $1330 ($1630 - $300) to the landlord, covering the rent and utilities up to the SAFMR limit.
The reimbursement gap or surplus in ZIP 36527 is calculated by comparing the SAFMR to the local market rent. Given the SAFMR of $1630 and the local market rent of $1,570, there is a surplus of $60 per month. This means landlords could potentially earn $60 more than the local market average when renting to tenants with Section 8 vouchers.
This surplus allows landlords to either keep more profit or offer slightly better amenities or maintenance services without reducing their overall income. However, it is important to note that the surplus can fluctuate based on the tenant's income and other factors, so landlords should carefully review individual cases.
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.