Section 8 Fair Market Rent (FMR) for ZIP 36535 - 2027

Investment Score for ZIP 36535

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$1,090
1 Bedroom	$1,210
2 Bedrooms	$1,320
3 Bedrooms	$1,710
4 Bedrooms	$2,160
5 Bedrooms	$2,506
6 Bedrooms	$2,807
7 Bedrooms	$3,032
8 Bedrooms	$3,184

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$1,320	$244,058	0.54%	F
3BR	$1,710	$285,813	0.6%	F
4BR	$2,160	$348,182	0.62%	D
5BR	$2,506	$454,894	0.55%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 36535 (Foley, AL) #### Section 8 Voucher Dynamics In ZIP code 36535, Foley, Alabama, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $1,200 per month for 2026. This represents 21.6% of the median household income of $66,714. However, the actual rent in the area can be significantly higher. For instance, the Zillow median price for a two-bedroom home is $239,827, which translates into a rental value that is approximately 16.7 times the FMR. This suggests that the actual rental market is much pricier than the FMR, creating a significant constraint for Section 8 voucher holders who must find housing within the FMR limits. #### Affordability & Renter Profile The population of Foley is 40,628, with 22.6% being renters. This indicates a moderate rental market where approximately 9,198 individuals are likely to be looking for rental properties. The occupancy rate of 89.0% suggests that the market is relatively tight, with most available units being occupied. Given the high price-to-FMR ratio, it is clear that many renters, particularly those relying on Section 8 vouchers, will struggle to find affordable housing options. The median household income of $66,714 implies that the majority of residents have a middle-class income level, but the high rental costs mean that affordability remains a challenge for many. #### Investor Angle From an investor perspective, the ZIP code 36535 presents a mixed picture. While the rental market is robust, with a high occupancy rate and significant demand, the actual rents far exceed the FMR. An investor focusing solely on Section 8 tenants would face challenges due to the limited pool of potential occupants who can afford the rent within the voucher limits. However, if an investor can attract a mix of tenants, including those who do not rely exclusively on Section 8 vouchers, there could be opportunities for positive cash flow. The investment grade for this ZIP code would be considered moderate to low for Section 8-focused investments due to the high discrepancy between FMR and actual rents. Investors might need to consider alternative strategies, such as offering amenities or services that appeal to a broader range of renters, to ensure a steady stream of income. #### Specific Actionable Insights 1. **Target Mixed-Income Properties**: Given the high price-to-FMR ratio, investors should focus on properties that can cater to both Section 8 voucher holders and other renters. A strategy could involve setting rents slightly above the FMR but still below market rates, thereby attracting a wider range of tenants. For example, a two-bedroom apartment priced at $1,350 would still be attractive to some non-voucher renters while remaining within reach for Section 8 holders. 2. **Focus on Smaller Units**: Since the FMR for smaller units (like one-bedroom apartments) is lower ($1,070), these units are more likely to be affordable for Section 8 voucher holders. Investing in smaller units could provide a better chance of securing tenants who use Section 8 vouchers. Additionally, smaller units tend to have higher occupancy rates and are often in higher demand. 3. **Consider Location-Specific Amenities**: Foley has a growing population and a mix of residential and commercial areas. Offering amenities like on-site laundry facilities, parking, or proximity to public transportation can make a property more appealing to a broader range of renters. These amenities can help justify slightly higher rents while still remaining within the FMR limits for Section 8 voucher holders. #### Bottom Line For investors focused specifically on Section 8 tenants, the ZIP code 36535 (Foley, AL) is a challenging market due to the high actual rents compared to the FMR. The recommendation would be to **Skip** this ZIP code for pure Section 8 investments. However, if investors are willing to adopt a mixed-income approach and offer competitive amenities, they might find it more feasible to achieve positive cash flow. In such cases, the recommendation shifts towards **Hold**, with a cautious approach to pricing and targeting a diverse tenant base.

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.