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 |
|---|---|---|---|---|
| 1BR | $1,500 | $412,925 | 0.36% | F |
| 2BR | $1,630 | $551,897 | 0.3% | F |
| 3BR | $2,110 | $748,411 | 0.28% | F |
| 4BR | $2,670 | $1,188,472 | 0.22% | F |
| 5BR | $3,097 | $1,841,903 | 0.17% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 36561, which encompasses Orange Beach, AL, within Baldwin County, are straightforward when analyzed against the specific figures provided. For fiscal year 2024, the SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP code is set at $1610. This figure is crucial because it directly impacts the reimbursement rate that landlords can expect from the housing authority for a Section 8 voucher tenant.
In contrast, the local market rent for a two-bedroom unit, as indicated by ZORI (Zillow Observed Rent Index), stands at $2,708. This significant difference between the SAFMR and the actual market rent means landlords need to carefully consider their rental strategy if they wish to participate in the Section 8 program.
A landlord's reimbursement under Section 8 is calculated based on the SAFMR minus the tenant's portion of the rent. Typically, the tenant's portion is around 30% of their income, but it cannot exceed the maximum payment standard set by HUD (Department of Housing and Urban Development). For ZIP 36561, if we assume an average tenant contribution of $483 (which is 30% of the SAFMR), the landlord would receive the remaining $1127 from the housing authority. However, the actual amount can vary depending on the tenant's income and the specific terms of their voucher.
Beyond the base rent, landlords should also be aware of utility allowances. These allowances are additional payments made by the housing authority to cover utilities such as electricity, water, and gas. The utility allowance for ZIP 36561 is not specified here, but it can range from $200 to $400 per month, depending on the specifics of the voucher and the number of bedrooms. Adding a conservative estimate of $300 for utilities, the total reimbursement a landlord might receive for a two-bedroom apartment could be around $1427.
This brings us to the key point for landlords: the reimbursement gap. With the local market rent at $2,708 and the total estimated reimbursement from Section 8 at $1427, there is a substantial gap of $1281 that the landlord must absorb unless they can find ways to reduce costs or increase efficiency. Alternatively, if a landlord sets their rent closer to the SAFMR rather than the local market rate, they could avoid this gap entirely, but they would also be foregoing higher potential rents.
In summary, for a two-bedroom apartment in ZIP 36561, landlords participating in the Section 8 program can expect a reimbursement of approximately $1427, which includes both the base rent and utility allowances. This leaves a notable reimbursement gap of $1281 compared to the local market rent, highlighting the financial considerations involved in accepting Section 8 vouchers.
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.