Location: Bergen-Passaic, NJ | Metro: Bergen-Passaic, 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 | $2,660 |
| 1 Bedroom | $2,980 |
| 2 Bedrooms | $3,420 |
| 3 Bedrooms | $4,150 |
| 4 Bedrooms | $5,240 |
| 5 Bedrooms | $6,078 |
| 6 Bedrooms | $6,807 |
| 7 Bedrooms | $7,352 |
| 8 Bedrooms | $7,720 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $4,150 | $1,057,327 | 0.39% | F |
| 4BR | $5,240 | $1,482,962 | 0.35% | F |
| 5BR | $6,078 | $2,275,364 | 0.27% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 07417 reveals a stark contrast between the federal market rent (FMR) and the actual market rent, impacting potential investment yields significantly.
Based on the Fair Market Rent (FMR) for a 2-bedroom apartment set at $2840 annually for fiscal year 2024, the implied gross yield can be calculated. Given the median home value in the area is $1,556,357, the annualized FMR represents an implied gross yield of approximately 0.18%. This is calculated by dividing the annual rent ($2840) by the median home value ($1,556,357).
In contrast, using the market rent figure of $3,223 derived from the Census ACS, the implied gross yield increases to about 0.21%. This calculation also divides the annual market rent ($3,223) by the median home value ($1,556,357).
The difference between these two gross yields is notable, with the market rent scenario offering a slightly higher return. However, considering the low renter density of 11.2%, the FMR scenario appears more realistic. This lower density suggests that a significant portion of housing units are occupied by owners rather than renters, making it challenging to consistently lease properties at market rates. Additionally, the lack of data on days on market (DOM) indicates uncertainty in how quickly rental units can be filled, further supporting the conservative FMR-based yield.
Investors should take into account these gross yields when evaluating the profitability of Section 8 investments in ZIP 07417. While the market rent provides a higher yield, the FMR reflects a more probable scenario given the local housing market conditions. The choice between these scenarios will depend on the investor's risk tolerance and market expectations.
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.