Section 8 Fair Market Rent (FMR) for ZIP 07107 - 2027

Investment Score for ZIP 07107

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	$1,460
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

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
3BR	$2,490	$449,660	0.55%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 07107, New Jersey #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 07107, as set by HUD for 2026, provide a benchmark for rental costs in the area. For a two-bedroom unit, the FMR is $1930, which represents 45.2% of the median household income of $51,242. This suggests that the rent for a two-bedroom unit is relatively affordable for those receiving Section 8 vouchers. However, without recent Zillow data, it's challenging to compare these figures directly to actual market rents. Given the high renter percentage (70.9%) and occupancy rate (95.4%), it's likely that the actual market rents are close to or slightly above the FMR levels, indicating a tight rental market where demand exceeds supply. #### Affordability & Renter Profile ZIP code 07107 has a significant population of renters, with 70.9% of households being tenants. The median household income is $51,242, which means that a substantial portion of residents rely on rental assistance programs like Section 8 to afford housing. The high occupancy rate of 95.4% indicates that there is little vacancy, suggesting a robust demand for rental properties. This tight market makes it difficult for low-income individuals to find affordable housing without assistance, as the FMR for a two-bedroom unit is already a significant portion of their income. #### Investor Angle From an investor perspective, the ZIP code 07107 appears to be a potentially profitable market due to the high demand for rental properties. However, the cash flow potential for investors would depend on whether they can achieve rental rates that are competitive with the market while still remaining within the FMR guidelines. For example, a two-bedroom unit at the FMR of $1930 would need to cover operating expenses, mortgage payments (if applicable), and generate a profit. If we assume a conservative operating expense ratio of 50%, then the net income per unit would be approximately $965 per month. This figure would need to be compared against the mortgage payment or other financing costs to determine if the property is cash-flow positive. Given the lack of recent Zillow data, we cannot definitively state whether the market rents are higher than the FMR. However, the high occupancy rate suggests that rents are likely close to or above the FMR levels, making it feasible for investors to achieve cash-flow positive properties if they can manage their expenses effectively. #### Specific Actionable Insights 1. **Focus on Two-Bedroom Units**: Given the high renter percentage and the fact that 45.2% of the median income is allocated to a two-bedroom unit, investors should consider acquiring properties that offer two-bedroom units. These units are most likely to be rented out by Section 8 voucher holders and will have a steady demand. 2. **Optimize Operating Expenses**: With a high occupancy rate, landlords can expect consistent rental income. However, to ensure profitability, it’s crucial to keep operating expenses below 50% of the rental income. This includes maintenance, utilities, insurance, and property taxes. By managing these costs effectively, investors can maximize their returns. 3. **Consider Financing Options**: If purchasing properties, investors should explore financing options that allow them to keep monthly mortgage payments below the net income derived from the FMR. For instance, a two-bedroom unit at $1930 FMR would need to cover an operating expense of around $965, leaving about $965 for mortgage payments and profit. Securing a loan with a lower interest rate or longer amortization period could help achieve this balance. #### Bottom Line For Section 8-focused investors, ZIP code 07107 presents a mixed picture. While the high renter percentage and occupancy rate indicate strong demand, the lack of recent market data makes it challenging to assess the exact rental environment. Based on the available data, the recommendation would be to **Hold** on investments until more current market data becomes available. This will allow investors to make informed decisions about whether the actual market rents align closely with the FMR, ensuring both affordability for tenants and profitability for landlords.

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.