Location: Newark, NJ | Metro: Newark, NJ HUD Metro FMR Area
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 | $1,460 |
| 1 Bedroom | $1,640 |
| 2 Bedrooms | $1,990 |
| 3 Bedrooms | $2,490 |
| 4 Bedrooms | $2,830 |
| 5 Bedrooms | $3,283 |
| 6 Bedrooms | $3,677 |
| 7 Bedrooms | $3,971 |
| 8 Bedrooms | $4,170 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,990 | $452,934 | 0.44% | F |
| 3BR | $2,490 | $559,472 | 0.45% | F |
| 4BR | $2,830 | $669,036 | 0.42% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 07034, Lake Hiawatha, NJ, provides insight into the potential returns for landlords and small-portfolio investors. Using the Federal Market Rent (FMR) for a two-bedroom apartment at $1720 per month, the annualized rent comes to $20,640. The median home value in this area is $522,781. To calculate the gross yield based on the FMR, we divide the annual rent by the median home value, resulting in a gross yield of approximately 3.95%. This is calculated as follows: $20,640 / $522,781 = 0.0395 or 3.95%.
On the other hand, using the market rent figure of $1,550 per month from the Census ACS, the annualized rent amounts to $18,600. Applying this to the median home value, the gross yield drops to about 3.56%, computed by dividing $18,600 by $522,781.
The difference between these two gross yields highlights the impact of the Section 8 program on rental income. At 3.95%, the FMR scenario suggests a slightly higher return compared to the market rent scenario at 3.56%. However, the reality of the situation must be considered. With a renter density of 41.5%, it's clear that a significant portion of the population is renting, which could support a higher demand for subsidized housing options. The N/A-day DOM (days on market) indicates incomplete data regarding how quickly properties are rented out, which could mean either very high demand or other factors affecting vacancy rates.
Given the data, the FMR scenario appears more realistic for Section 8 properties due to the higher guaranteed rent payment. However, landlords should also consider the administrative overhead and potential maintenance issues associated with Section 8 tenancy. The market rent scenario reflects the actual rental environment but offers a lower gross yield. Investors should weigh these factors carefully when deciding whether to participate in the Section 8 program in Lake Hiawatha, NJ.
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.