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 | $1,130 |
| 1 Bedroom | $1,260 |
| 2 Bedrooms | $1,370 |
| 3 Bedrooms | $1,770 |
| 4 Bedrooms | $2,240 |
| 5 Bedrooms | $2,598 |
| 6 Bedrooms | $2,910 |
| 7 Bedrooms | $3,143 |
| 8 Bedrooms | $3,300 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $1,770 | $265,891 | 0.67% | D |
| 4BR | $2,240 | $329,863 | 0.68% | D |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $1,250 for ZIP 36551 can sufficiently cover the mortgage on a home priced at $282,240. This concern is valid; however, the FMR is set to ensure that rental costs remain affordable for low-income families, which means it should be achievable given the local housing market conditions. It's important to note that the FMR is not a guarantee but an estimate based on market conditions.
The second objection could be around the level of renter demand in the area, which stands at 19.7%. This percentage indicates the proportion of households that are renters, suggesting a moderate demand for rental properties. While this figure is not exceptionally high, it does represent a significant portion of the population. The key here is to understand the local demographics and whether there are factors driving demand, such as job growth or proximity to urban centers, which could sustain or increase rental occupancy rates.
A final point of contention might be whether Housing Choice Vouchers will keep pace with the market rents, currently estimated at $1,156. The voucher program aims to bridge the gap between what low-income families can afford and the actual cost of renting. In ZIP 36551, the FMR is slightly higher than the average market rent, indicating that vouchers should generally cover the difference. However, the effectiveness of this coverage depends on the availability of vouchers and the local administration's ability to manage the program efficiently.
To address these concerns directly:
The FMR of $1,250 is designed to be realistic for the area, though it won't cover the entire mortgage payment on a $282,240 home. Landlords must consider other income sources or lower their acquisition costs to align with rental yields.
The 19.7% renter rate suggests that while demand is present, it may not be overwhelming. Investors should research further into local economic trends and tenant preferences to gauge the sustainability of rental income.
Vouchers are intended to support tenants up to the $1,250 FMR, which exceeds the current average market rent of $1,156. This indicates that vouchers should continue to be a viable option for landlords, though fluctuations in funding and administrative efficiency could impact future performance.
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.