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 | $1,550 |
| 1 Bedroom | $1,740 |
| 2 Bedrooms | $2,000 |
| 3 Bedrooms | $2,430 |
| 4 Bedrooms | $3,060 |
| 5 Bedrooms | $3,550 |
| 6 Bedrooms | $3,976 |
| 7 Bedrooms | $4,294 |
| 8 Bedrooms | $4,509 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,430 | $438,106 | 0.55% | F |
U.S. Census Bureau data (2024)
In ZIP code 07522, the financial landscape for Section 8 properties presents a clear picture when comparing federal market rent (FMR) to the local market rent. For a two-bedroom unit, the annualized FMR for FY 2024 is $1590, while the Zillow Observed Rent Index (ZORI) indicates a market rent of $2000 per month.
The median home value in this area is $480,764. Using these figures, we can calculate the implied gross yield for both the FMR and market rent scenarios. The gross yield for the FMR scenario is approximately 3.5%, calculated by multiplying the monthly rent ($1590) by 12 months and dividing by the median home value ($480,764). Conversely, the gross yield for the market rent scenario stands at about 5%, derived similarly by using the higher monthly rent figure ($2000).
Given the high renter density of 79.9%, it's evident that there is significant demand for rental properties in ZIP 07522. However, the lack of data on days-on-market (DOM) makes it challenging to assess the speed at which properties are leased, especially under the Section 8 program. Despite this limitation, the higher gross yield of 5% based on market rent is more indicative of the potential returns for landlords and small-portfolio investors in this region.
The lower gross yield of 3.5% associated with the FMR is still a viable option, particularly for those who prioritize stable, government-backed income. However, the market rent scenario offers a better reflection of the current rental environment and the strong tenant demand present in ZIP 07522. This suggests that landlords could potentially achieve higher gross yields if they manage to secure tenants willing to pay closer to the market rate, even if it means navigating the complexities of the Section 8 program.
To summarize, the gross yield comparison between the FMR and market rent scenarios highlights the trade-offs between guaranteed, albeit lower, returns versus the possibility of achieving higher yields through market-driven rental rates. Landlords should consider the strong rental market and high tenant density when deciding whether to participate in the Section 8 program or seek market-rate tenants.
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.