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 | $1,000 |
| 1 Bedroom | $1,040 |
| 2 Bedrooms | $1,210 |
| 3 Bedrooms | $1,570 |
| 4 Bedrooms | $1,660 |
| 5 Bedrooms | $1,926 |
| 6 Bedrooms | $2,157 |
| 7 Bedrooms | $2,330 |
| 8 Bedrooms | $2,447 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,210 | $143,591 | 0.84% | C |
| 3BR | $1,570 | $220,909 | 0.71% | D |
| 4BR | $1,660 | $312,013 | 0.53% | F |
U.S. Census Bureau data (2024)
The analysis for the Section 8 program in ZIP code 36575 reveals a significant gap between the Fair Market Rent (FMR) and the actual market rent. For fiscal year 2024, the FMR is set at $1,120, while the Census ACS data indicates that the market rent is $1,101. This means that the FMR is $19 higher than the market rent, representing a 1.73% premium.
In Semmes, Alabama, where the median home value is $239,386 and the median income is $75,884, this slight premium on FMR can be a strategic advantage for landlords and small-portfolio investors. The 16.5% of residents who are renters often rely on housing vouchers, which are tied to the FMR. Therefore, landlords accepting voucher tenants can secure a consistent, government-backed rental income that is slightly above the current market rate.
This makes the area a yield play for investors. By accepting Section 8 tenants, landlords can ensure a steady stream of payments without the risk associated with fluctuating market rents. The government guarantees the payment up to the FMR, which, in this case, is higher than what most non-voucher tenants might pay on the open market.
However, it's important to note that accepting housing voucher tenants comes with its own set of considerations. Landlords must comply with HUD regulations, which can include regular inspections and maintaining a certain standard of property quality. Additionally, the administrative process for setting up and managing voucher tenants can be more complex than renting to cash-paying tenants.
In conclusion, the $19 premium on FMR in ZIP 36575 provides a compelling reason for landlords to consider accepting Section 8 tenants. This slight increase can enhance yields and provide a more stable income source compared to the open market. Nonetheless, the decision should weigh the benefits against the regulatory compliance and administrative overhead involved.
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.