Section 8 Fair Market Rent (FMR) for ZIP 07032 - 2027

Investment Score for ZIP 07032

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	$2,290
1 Bedroom	$2,340
2 Bedrooms	$2,600
3 Bedrooms	$3,160
4 Bedrooms	$3,700
5 Bedrooms	$4,292
6 Bedrooms	$4,807
7 Bedrooms	$5,192
8 Bedrooms	$5,452

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
2BR	$2,600	$451,323	0.58%	F
3BR	$3,160	$568,694	0.56%	F
4BR	$3,700	$660,867	0.56%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 07032 (Kearny, NJ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 07032, as set by HUD for 2026, is $2510 for a two-bedroom unit. This represents 38.1% of the median household income of $79,154 in the area. The FMR is designed to reflect the average rent that a tenant can afford while maintaining a reasonable standard of living. However, it is important to understand how these FMRs compare to actual rental rates in the market. According to the Zillow median price for a two-bedroom home in ZIP 07032, the value is $441,342. This translates to a price-to-FMR ratio of 14.7 times, indicating that the median home price is significantly higher than the FMR. For voucher holders, this means that the maximum rent they can pay under the Section 8 program is capped at $2510 for a two-bedroom unit. This constraint can limit their housing options, particularly in a market where the median home price is so much higher than the FMR. #### Affordability & Renter Profile ZIP 07032 has a high occupancy rate of 96%, suggesting that the housing market is tight. With 57.1% of households being renters, there is a significant demand for rental properties. The median household income of $79,154 provides some context on the economic profile of residents, but given that 38.1% of this income is allocated towards a two-bedroom unit, it highlights the affordability challenges faced by renters. The high price-to-FMR ratio of 14.7x indicates that the market is likely overpriced relative to what many renters can afford. This suggests that the market is relatively tight, with limited affordable options available for low-income families. Given the high renter percentage and occupancy rate, it is clear that the demand for rental units is strong, but the supply of affordable units may be constrained. #### Investor Angle From an investor perspective, the ZIP code's FMRs provide a benchmark for potential rental income. To determine if the ZIP is cash-flow positive at FMR, we need to consider the typical rental yields and expenses associated with property management. Assuming a conservative annual rental yield of 5% for a two-bedroom unit priced at $441,342, the expected annual rental income would be approximately $22,067. Dividing this by 12 months gives a monthly rental income of about $1839. This is below the FMR of $2510 for a two-bedroom unit, which suggests that properties priced at the FMR level could potentially generate positive cash flow. However, the actual cash flow will depend on factors such as mortgage payments, property taxes, insurance, maintenance costs, and vacancy rates. If we assume a mortgage payment of around $1500 per month, property taxes of $300, insurance of $100, and maintenance costs of $100, the total monthly expenses would be approximately $1900. This leaves a small margin for profit, especially considering the possibility of vacancies and other unforeseen expenses. Given the high price-to-FMR ratio and the tight market conditions, the investment grade for this ZIP code is moderate. While there is potential for positive cash flow, the high purchase price and limited affordability for low-income tenants mean that the risk is also elevated. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units like one-bedroom apartments. The FMR for a one-bedroom unit is $2230, which is lower than the FMR for a two-bedroom unit. This could help mitigate the risk of not finding tenants who qualify for the Section 8 program. 2. **Consider Renovation Projects**: Investors might find opportunities in older properties that require renovation. By investing in renovations, they can potentially increase the rental value while still keeping it within the FMR limits. This approach can also make the property more attractive to a broader range of tenants, including those who do not rely on Section 8 vouchers. 3. **Explore Multi-Family Properties**: Multi-family properties can offer economies of scale, reducing the overall cost per unit. A multi-family property with multiple one-bedroom or studio units could be more financially viable than a single larger unit. Additionally, multi-family properties often have higher occupancy rates, which can improve cash flow stability. #### Bottom Line For Section 8-focused investors, the ZIP code 07032 presents a challenging yet potentially rewarding opportunity. The high price-to-FMR ratio and tight market conditions suggest that while there is demand for rental properties, the supply of affordable units is limited. Therefore, the recommendation for investors is to **Hold** or **Skip** this ZIP code unless they can identify specific opportunities that align with the actionable insights mentioned above. Focusing on smaller units, renovating existing properties, or exploring multi-family investments could make this ZIP code more attractive for Section 8 investors. In summary, ZIP 07032 has a strong rental market with limited affordable options, making it a moderate-risk investment. Investors should carefully evaluate their strategies and consider the specific constraints and dynamics of the Section 8 program when deciding whether to enter this market.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.