Section 8 Fair Market Rent (FMR) for ZIP 36695 - 2027

Investment Score for ZIP 36695

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	$1,100
1 Bedroom	$1,150
2 Bedrooms	$1,330
3 Bedrooms	$1,720
4 Bedrooms	$1,830
5 Bedrooms	$2,123
6 Bedrooms	$2,378
7 Bedrooms	$2,568
8 Bedrooms	$2,696

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	$1,330	$184,874	0.72%	D
3BR	$1,720	$236,736	0.73%	D
4BR	$1,830	$336,083	0.54%	F
5BR	$2,123	$423,042	0.5%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 36695 (Mobile, AL) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 36695, as per the 2026 data, is set at $1270 for a two-bedroom unit, which represents 20.0% of the median household income in the area. This means that the maximum rent allowed by the Housing Choice Voucher Program (commonly known as Section 8) for a two-bedroom apartment is $1270. However, the Zillow median price for a two-bedroom home in this ZIP code is $181,209, indicating a significant disparity between the value of the property and the rental limits imposed by the voucher program. Given the price-to-FMR ratio of 11.9x, it is clear that the actual market rents are substantially higher than the FMR. For instance, a typical two-bedroom unit might cost around $14,500 annually ($1270 x 11.9), whereas the FMR allows only $15,240 over a 12-month period ($1270 x 12). This creates a constraint for voucher holders who may struggle to find suitable housing within the allowable rent range. Many landlords might be unwilling to accept vouchers due to the lower rent compared to market rates. #### Affordability & Renter Profile ZIP code 36695 has a population of 52,690, with 30.6% of residents being renters. The occupancy rate stands at 93.8%, suggesting a relatively tight market where most available units are occupied. Given the median household income of $76,040, the majority of residents can afford market-rate rents, but a significant portion of the population relies on affordable housing options. The median household income indicates that the average resident could potentially spend up to $1520 monthly on housing based on the general rule of thumb that housing costs should not exceed 20% of income. However, the FMR for a two-bedroom unit is $1270, which is well below what many residents might be willing to pay. This suggests that while there is demand for affordable housing, the voucher program may not fully meet the needs of all low-income renters, especially those who need larger units. #### Investor Angle From an investor perspective, the ZIP code 36695 presents a mixed picture when considering the cash flow potential at FMR levels. The FMR for a two-bedroom unit is $1270, which is significantly lower than the market rent. If we assume a market rent of approximately $14,500 annually, the FMR of $15,240 would be considerably less attractive for landlords looking to maximize their returns. However, the tight market conditions with a high occupancy rate suggest that there is strong demand for rental properties. Investors who are willing to accept Section 8 vouchers might still find a niche market, particularly if they can offer well-maintained, desirable units that appeal to voucher holders. The investment grade in this ZIP code would likely be moderate to low due to the lower rent ceiling imposed by the voucher program, but the strong demand could provide some stability. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the constraints of the voucher program, investing in smaller units such as one-bedroom or studio apartments might be more lucrative. The FMR for a one-bedroom unit is $1080, which is closer to the market rent for these types of units. This could provide better cash flow opportunities for investors willing to accept vouchers. 2. **Consider Renovation Projects**: Investing in older properties that can be renovated and brought up to standard could make them more attractive to voucher holders. This strategy could help landlords secure tenants more easily, even if they must accept lower rents due to the voucher program. 3. **Diversify Tenant Base**: While focusing on Section 8 vouchers, it might also be beneficial to diversify the tenant base by offering a mix of market-rate and voucher units. This approach can help mitigate the risk of relying solely on voucher tenants, who may have additional requirements and regulations. #### Bottom Line For investors focused specifically on Section 8 vouchers, ZIP code 36695 presents a challenging environment due to the significant gap between FMR and market rents. The recommendation would be to **skip** this ZIP code unless you are prepared to focus on smaller units or undertake renovation projects to improve cash flow. The tight market conditions and high occupancy rates indicate that there is demand for rental properties, but the lower rent ceilings imposed by the voucher program make it less attractive for maximizing returns. If you are willing to take a more diversified approach and consider a mix of market-rate and voucher tenants, then **hold** might be a reasonable stance. However, for purely Section 8-focused investments, the ZIP code is not recommended due to the financial constraints and limited upside potential.

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.