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 | $1,580 |
| 1 Bedroom | $1,790 |
| 2 Bedrooms | $2,160 |
| 3 Bedrooms | $2,690 |
| 4 Bedrooms | $3,080 |
| 5 Bedrooms | $3,573 |
| 6 Bedrooms | $4,002 |
| 7 Bedrooms | $4,322 |
| 8 Bedrooms | $4,538 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,790 | $174,101 | 1.03% | B |
| 2BR | $2,160 | $245,991 | 0.88% | C |
| 3BR | $2,690 | $375,081 | 0.72% | D |
| 4BR | $3,080 | $539,920 | 0.57% | F |
U.S. Census Bureau data (2024)
The Section 8 thesis for ZIP code 07462 in Vernon, New Jersey, centers around the disparity between the Fair Market Rent (FMR) and the actual market rent. The FMR for ZIP 07462, as set by the Department of Housing and Urban Development (HUD) for fiscal year 2024, is $1910. In contrast, the Census ACS data indicates that the average market rent in the area is $1648. This means the FMR is $262 higher than the market rent, representing an increase of approximately 15.9%.
The gap suggests that landlords who accept Section 8 vouchers in Vernon, NJ can expect a higher rental income compared to the open market. This makes it a yield play for those willing to navigate the requirements and regulations associated with the program. With a median home value of $302,611 and a median income of $95,945, Vernon's real estate market is relatively stable but not without challenges. Only 16.2% of residents are renters, indicating a smaller pool of potential voucher holders relative to homeowners.
However, accepting Section 8 vouchers comes with its own set of considerations. Landlords must ensure that their properties meet HUD's housing quality standards (HQS), which can involve additional maintenance costs and compliance efforts. Furthermore, the income level of Section 8 tenants is capped, meaning that while the guaranteed payment through the voucher program might be slightly above market rates, the overall income potential could be lower than renting to market-rate tenants.
In Vernon, NJ, the higher FMR compared to market rent signals a favorable scenario for landlords looking to maximize their yields. However, they should also consider the broader economic context of the area, including the limited number of renters and the financial capacity of residents. By accepting Section 8 vouchers, landlords can secure steady rental income, albeit at a slight premium over the local market rate, while contributing to affordable housing in a community where the median income is $95,945 and the median home value stands at $302,611.
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.