Section 8 Fair Market Rent (FMR) for ZIP 07306 - 2027

Investment Score for ZIP 07306

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	$2,290
1 Bedroom	$2,340
2 Bedrooms	$2,600
3 Bedrooms	$3,160
4 Bedrooms	$3,700
5 Bedrooms	$4,292
6 Bedrooms	$4,807
7 Bedrooms	$5,192
8 Bedrooms	$5,452

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	$2,340	$363,041	0.64%	D
2BR	$2,600	$516,179	0.5%	F
3BR	$3,160	$705,046	0.45%	F
5BR	$4,292	$795,148	0.54%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 07306 (Jersey City, NJ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 07306 is set by HUD for 2026, and it ranges from $2200 for a 0-bedroom unit to $3620 for a 4-bedroom unit. However, the Zillow median price for a 2-bedroom home in this area is $503,393, which translates to a price-to-FMR ratio of 16.6x. This means that the actual market rent for a 2-bedroom unit is likely much higher than the FMR. For instance, if we assume a conservative rental yield of 5%, the implied monthly rent would be around $2097. Given the FMR for a 2-bedroom unit is $2530, the actual market rent could be significantly higher, possibly ranging between $2500 and $3000 per month. This creates a significant constraint for Section 8 voucher holders. The maximum allowable rent under the voucher program is capped at the FMR, which is $2530 for a 2-bedroom unit. In a market where rents are likely higher, voucher holders may struggle to find suitable housing options that fit within their budget. Additionally, landlords might be less inclined to participate in the Section 8 program due to the lower rents compared to what they could charge in the open market. #### Affordability & Renter Profile ZIP code 07306 has a high occupancy rate of 92.0%, indicating a tight rental market. With 75.8% of households being renters, there is a substantial demand for rental properties. The median household income in this area is $74,953, but the FMR for a 2-bedroom unit represents 40.5% of this income. This suggests that many residents may face affordability challenges, especially those who rely on Section 8 vouchers. Given the high renter percentage and occupancy rate, it is clear that Jersey City is a desirable location for both short-term and long-term residents. The population of 54,017 supports a robust rental market, but the high price-to-FMR ratio indicates that the market is skewed towards higher-end rentals. This tight market dynamic makes it challenging for low-income renters to secure affordable housing, particularly when the FMR is only a fraction of the actual market rent. #### Investor Angle From an investor perspective, the ZIP code 07306 presents mixed opportunities. The Zillow median price for a 2-bedroom unit is $503,393, and assuming a conservative rental yield of 5%, the expected monthly rent would be approximately $2097. However, the FMR for a 2-bedroom unit is $2530, which is significantly lower than the market rent. If an investor were to purchase a property in this ZIP code and rent it out at the FMR, they would likely see negative cash flow unless they can leverage other subsidies or incentives. To determine the investment grade, we must consider the potential for positive cash flow and the overall desirability of the area. Given the high occupancy rate and strong demand for rental properties, the ZIP code is attractive for investors. However, the limited number of voucher holders who can afford the FMR and the competition from higher-end rentals make it a challenging market for Section 8-focused investments. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Since the FMR for smaller units (0BR and 1BR) is lower ($2200 and $2250 respectively), investors should consider purchasing or developing smaller units to maximize the likelihood of positive cash flow. These units are more affordable for voucher holders and may have better occupancy rates due to the high demand for smaller living spaces in urban areas. 2. **Seek Out-of-Voucher Options**: Investors looking to capitalize on the high demand for rental properties should consider renting out their units at market rates rather than participating in the Section 8 program. While this approach excludes low-income tenants, it ensures a more stable and profitable cash flow given the high price-to-FMR ratio. 3. **Explore Government Subsidies**: To improve the viability of Section 8-focused investments, investors should look into additional government subsidies or programs that can help bridge the gap between FMR and market rent. For example, some cities offer tax incentives or grants for developers who build affordable housing units. #### Bottom Line For investors focusing specifically on Section 8 vouchers, ZIP code 07306 presents a challenging environment. The high price-to-FMR ratio and limited availability of affordable units suggest that this ZIP code is not ideal for cash-flow positive investments. Therefore, the recommendation for Section 8-focused investors is to **skip** this ZIP code and consider other areas with a more favorable price-to-FMR ratio and greater availability of affordable units. Investors interested in the broader rental market should focus on properties that can be rented at market rates to ensure profitability.

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.