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 | $2,170 |
| 1 Bedroom | $2,460 |
| 2 Bedrooms | $2,960 |
| 3 Bedrooms | $3,690 |
| 4 Bedrooms | $4,230 |
| 5 Bedrooms | $4,907 |
| 6 Bedrooms | $5,496 |
| 7 Bedrooms | $5,936 |
| 8 Bedrooms | $6,233 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $3,690 | $986,026 | 0.37% | F |
| 4BR | $4,230 | $1,137,310 | 0.37% | F |
| 5BR | $4,907 | $1,453,872 | 0.34% | F |
U.S. Census Bureau data (2024)
The analysis for ZIP code 07092 reveals a nuanced picture when considering Section 8 properties versus market-rate rentals. For a two-bedroom property, the Fair Market Rent (FMR) for FY 2024 is set at $2870 per month under Section 8 guidelines. Annualizing this figure yields a gross income of $34,440 per year. In contrast, the Census ACS reports a market rent of $3,501 for the same type of unit, translating to an annual gross income of $42,012.
To determine the gross yield, we compare these annual incomes to the median home value in the area, which stands at $1,042,304. The Section 8 scenario would imply a gross yield of approximately 3.3% ($34,440 / $1,042,304), whereas the market-rate rental scenario suggests a higher gross yield of about 4.0% ($42,012 / $1,042,304).
Evaluating the realism of these scenarios requires consideration of the local rental market dynamics. With a renter density of only 12.1%, it's evident that the majority of homes in ZIP 07092 are owner-occupied, which could limit the pool of potential Section 8 tenants. Additionally, the absence of data on Days on Market (DOM) indicates either a robust demand for rental properties or a lack of recent transactional activity, making it difficult to gauge how quickly a Section 8 property might be occupied compared to market-rate units.
Given the low renter density, the market-rate rental scenario appears more plausible for achieving steady occupancy and higher returns. However, the Section 8 program offers stability and government-backed payments, which can mitigate risks associated with vacancy and delinquency. Investors must weigh the lower gross yield of 3.3% against the security and predictability of Section 8 tenancy.
In summary, while the market-rate rental scenario provides a higher gross yield of 4.0%, the Section 8 option offers a stable 3.3% yield with guaranteed payment structures. The choice between the two should be informed by the investor's risk tolerance and financial objectives.
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.