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 | $960 |
| 1 Bedroom | $1,000 |
| 2 Bedrooms | $1,160 |
| 3 Bedrooms | $1,500 |
| 4 Bedrooms | $1,590 |
| 5 Bedrooms | $1,844 |
| 6 Bedrooms | $2,065 |
| 7 Bedrooms | $2,230 |
| 8 Bedrooms | $2,342 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,160 | $72,749 | 1.59% | A+ |
| 3BR | $1,500 | $101,714 | 1.47% | A |
| 4BR | $1,590 | $131,336 | 1.21% | A |
U.S. Census Bureau data (2024)
Skeptical investors looking into ZIP 36605 in Mobile, AL, might have several concerns regarding the feasibility of investing in this area. Let's address these concerns with the available data.
Objection 1: Will FMR $1060 (zip FY 2024) cover the mortgage on an $89,346 home?
The Fair Market Rent (FMR) for ZIP 36605 is set at $1060 for fiscal year 2024. To determine if this will sufficiently cover the mortgage, we must first calculate the monthly mortgage payment based on the median home price of $89,346. Assuming a 30-year fixed-rate mortgage with a typical interest rate of 4%, the monthly mortgage payment would be approximately $427. This figure does not include property taxes and insurance, which can add another $100-$150 per month. Therefore, the FMR of $1060 would indeed cover the mortgage costs, leaving a buffer for other expenses such as maintenance and utilities.
Objection 2: Is there enough renter demand at 46.3%?
The rental vacancy rate in ZIP 36605 stands at 46.3%. While this percentage is high and suggests a significant portion of units are unoccupied, it's important to note that the demand for rental properties is still present. The key metric here is the occupancy rate, which is the inverse of the vacancy rate. In this case, the occupancy rate would be around 53.7%, indicating that over half of the rental units are occupied. Given that the median household income in the area is relatively low, the demand for affordable housing remains strong. Investors should focus on properties that align with the affordability of the local population to ensure steady occupancy.
Objection 3: Will vouchers keep pace with $1,239 market rents?
The median market rent for ZIP 36605 is $1,239, which is notably higher than the FMR of $1060. For landlords relying on Section 8 vouchers, this could pose a challenge since voucher amounts typically do not exceed the FMR. However, the Housing Choice Voucher program aims to adjust its payments annually based on inflation and housing cost trends. Although the data does not provide a direct comparison between voucher increases and market rent growth, historical trends suggest that while vouchers may lag behind market rents, they do increase over time. Landlords should consider the potential for additional non-voucher tenants who can afford the higher market rates, thereby diversifying their tenant base and reducing reliance solely on voucher programs.
In summary, while the data presents some challenges, particularly with regard to rental vacancy rates and the gap between market rents and voucher amounts, the FMR is sufficient to cover mortgage costs. Investors should be cautious but also recognize the potential for a stable investment when targeting the right demographic and managing expectations regarding rent levels and tenant mix.
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.