Section 8 Fair Market Rent (FMR) for ZIP 07052 - 2027

Investment Score for ZIP 07052

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	$1,850
1 Bedroom	$2,090
2 Bedrooms	$2,520
3 Bedrooms	$3,140
4 Bedrooms	$3,600
5 Bedrooms	$4,176
6 Bedrooms	$4,677
7 Bedrooms	$5,051
8 Bedrooms	$5,304

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
1BR	$2,090	$305,471	0.68%	D
2BR	$2,520	$517,229	0.49%	F
3BR	$3,140	$679,735	0.46%	F
4BR	$3,600	$839,415	0.43%	F
5BR	$4,176	$1,106,073	0.38%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 07052 (West Orange, NJ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 07052 in West Orange, NJ, is set by HUD for 2026. The FMRs are as follows: - 0BR: $1860 - 1BR: $2100 - 2BR: $2540 - 3BR: $3180 - 4BR: $3610 Comparing these figures to actual rents in the area, we can see that the FMRs are significantly lower than the typical rental rates. For instance, the FMR for a 2BR unit is $2540, while the Zillow median price for a similar property is $513,229. This suggests that the actual rent prices are much higher than what is covered by the vouchers. One major constraint for voucher holders is the limited availability of units that accept Section 8 vouchers. Given the high median household income ($129,475), landlords may prefer market-rate tenants who can afford higher rents. Additionally, the occupancy rate of 96.1% indicates a tight rental market, making it even more challenging for voucher holders to find suitable housing. #### Affordability & Renter Profile ZIP code 07052 has a population of 48,620, with 30.8% of residents being renters. The median household income is quite high at $129,475, which means that most residents have the financial capacity to pay market-rate rents. However, the 2BR FMR represents only 23.5% of the median income, indicating that Section 8 vouchers are affordable for a significant portion of the population. Despite the affordability, the high occupancy rate and the fact that the FMR is far below the market rate suggest that the rental market is very competitive. Landlords might be less inclined to participate in the Section 8 program due to the potential for lower rental income compared to market rates. This could lead to a shortage of available units for voucher holders, creating a challenging environment for those relying on government assistance. #### Investor Angle From an investor's perspective, the ZIP code 07052 presents a mixed picture when considering cash flow at FMR levels. The FMR for a 2BR unit is $2540, but the Zillow median price for such a unit is $513,229, resulting in a price-to-FMR ratio of 16.8x. This implies that the purchase price of properties in this area is extremely high relative to the rent they can command under the Section 8 program. Given the high purchase costs and the low FMRs, it is unlikely that an investor would achieve positive cash flow solely based on the FMRs. The investment grade would be considered low due to the limited rental income potential and the high initial capital required to enter the market. #### Specific Actionable Insights 1. **Focus on Larger Units**: Since the FMR for larger units (e.g., 3BR and 4BR) is higher, investors should consider acquiring properties with three or four bedrooms. For example, a 4BR unit has an FMR of $3610, which is closer to the market rate and may offer better cash flow opportunities. 2. **Negotiate with Landlords**: Given the high demand and limited supply, investors should work closely with landlords to negotiate terms that make Section 8 properties more attractive. This could include offering to cover some of the upfront costs associated with participating in the program or providing incentives for landlords to accept vouchers. 3. **Consider Alternative Financing Options**: Due to the high purchase prices, traditional financing may not be sufficient to achieve positive cash flow. Investors should explore alternative financing options, such as grants, subsidies, or partnerships with local organizations that support affordable housing initiatives. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP code 07052 is to **skip** this market. The high purchase prices and low FMRs make it difficult to achieve positive cash flow, and the tight rental market and high median income suggest that landlords will prefer market-rate tenants over those using Section 8 vouchers. While there are some actionable insights that could potentially improve the situation, the overall conditions are not favorable for investors looking to capitalize on the Section 8 program.

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.