Section 8 Fair Market Rent (FMR) for ZIP 07304 - 2027

Investment Score for ZIP 07304

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	$2,220
1 Bedroom	$2,270
2 Bedrooms	$2,520
3 Bedrooms	$3,060
4 Bedrooms	$3,590
5 Bedrooms	$4,164
6 Bedrooms	$4,664
7 Bedrooms	$5,037
8 Bedrooms	$5,289

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,270	$335,060	0.68%	D
2BR	$2,520	$470,441	0.54%	F
3BR	$3,060	$619,969	0.49%	F
4BR	$3,590	$676,225	0.53%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 07304 (Jersey City, NJ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 07304 is set by HUD for the year 2026 as follows: - 0 Bedroom (BR): $2140 - 1 BR: $2190 - 2 BR: $2460 (which is 41.6% of the median household income) - 3 BR: $3000 - 4 BR: $3520 To understand how these FMRs compare to actual rents, we need to consider the price-to-FMR ratio. For a two-bedroom unit, Zillow reports a median price of $466,347, which translates into a monthly rental cost of approximately $2174 based on typical mortgage rates and property values. This places the actual rent significantly above the FMR of $2460. The constraints for voucher holders are evident from the high actual rent costs compared to the FMR. A voucher holder would find it challenging to secure a two-bedroom unit at the FMR rate due to the tight rental market. The gap between the FMR and actual rents means that voucher holders might have to pay substantial out-of-pocket costs to cover the difference, making it difficult for them to find affordable housing options. #### Affordability & Renter Profile ZIP code 07304 has a population of 51,306, with 75.9% of residents being renters. This indicates a highly rented area where the majority of the population relies on rental housing. The occupancy rate of 93.6% suggests that the market is quite tight, with very few vacant units available. Given that the median household income is $70,986, the affordability of housing becomes a significant issue. The FMR for a two-bedroom unit is $2460, which is already a large portion of the median income at 41.6%. However, the actual rent is higher, putting even more financial strain on the residents. The high percentage of renters and the tight market conditions indicate that there is a strong demand for rental properties, but the supply is limited. #### Investor Angle From an investor’s perspective, the cash flow potential at FMR needs to be evaluated against the actual rental prices. Given that the actual rent for a two-bedroom unit is around $2174, and the FMR is $2460, the cash flow at FMR would likely be negative unless the property is purchased below the median price. The investment grade can be assessed by considering the tightness of the market and the high demand for rental units. Despite the negative cash flow at FMR, the strong rental market and high occupancy rates suggest that there is potential for steady long-term returns through appreciation and possible future increases in FMR. However, the initial investment risk is high due to the negative cash flow at current FMR levels. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Since the FMR for smaller units (0BR and 1BR) is closer to the actual rents ($2140 and $2190 respectively), investors should consider acquiring smaller units. These units are more likely to generate positive cash flow and are easier to manage in terms of finding tenants who can afford the rents. 2. **Consider Long-Term Appreciation**: Given the high demand and limited supply, investing in larger units (2BR, 3BR, and 4BR) could still be profitable over the long term. Investors should look for opportunities to purchase properties at a discount to the median price of $466,347 to ensure a better return on investment. 3. **Evaluate Property Management Costs**: Due to the tight market, managing properties effectively will be crucial. Investors should factor in higher management costs and possibly higher vacancy rates when calculating their overall investment strategy. #### Bottom Line For Section 8-focused investors, the recommendation is to **Skip** this ZIP code for now. The actual rents are significantly higher than the FMR, leading to negative cash flow scenarios for most units. While the market is strong and there is potential for future appreciation, the immediate financial burden on voucher holders and the high acquisition costs make it less attractive for short-term investments. Investors should wait for changes in FMR or a decrease in actual rental prices before considering this ZIP code for Section 8 properties.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-08-31). 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.