Section 8 Fair Market Rent (FMR) for ZIP 07601 - 2027

Investment Score for ZIP 07601

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	$1,990
1 Bedroom	$2,230
2 Bedrooms	$2,560
3 Bedrooms	$3,110
4 Bedrooms	$3,920
5 Bedrooms	$4,547
6 Bedrooms	$5,093
7 Bedrooms	$5,500
8 Bedrooms	$5,775

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	$2,230	$291,816	0.76%	D
2BR	$2,560	$391,399	0.65%	D
3BR	$3,110	$613,521	0.51%	F
4BR	$3,920	$709,057	0.55%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 07601 (Hackensack, NJ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Hackensack, NJ (ZIP 07601), is set by HUD for 2026. The FMRs for different unit types are as follows: - 0 Bedroom: $1910 - 1 Bedroom: $2180 - 2 Bedrooms: $2500 - 3 Bedrooms: $3050 - 4 Bedrooms: $3890 These figures represent the maximum rent that a household can pay using their Section 8 voucher. However, it is important to note that the actual rents in the area might be significantly higher. For instance, the Zillow median price for a 2-bedroom rental property in Hackensack is $388,970, which translates to a monthly rent of approximately $3,241 if we assume a typical mortgage rate and terms. This means that the actual rent for a 2-bedroom unit is about 13 times the FMR, indicating a substantial gap between what voucher holders can afford and the prevailing market rates. This gap creates significant constraints for voucher holders. They would need to find landlords willing to accept the lower FMR rates, which could be challenging given the high demand and limited supply of affordable units. Additionally, the 2BR FMR represents only 35.6% of the median household income ($84,277), suggesting that even without a voucher, many residents struggle to find housing they can afford. #### Affordability & Renter Profile Hackensack has a population of 46,057, with a very high percentage of renters at 63.4%. This indicates a strong rental market, likely driven by the high occupancy rate of 94.6%, meaning that most available units are already occupied. The median household income of $84,277 suggests that while some residents have relatively high incomes, the majority of renters are still struggling to find affordable housing. Given the high rent-to-income ratio and the fact that the actual rents are much higher than the FMR, the market is tight and undersupplied with affordable units. Many renters are likely to be low-income families, students, and young professionals who rely on Section 8 vouchers to secure housing. The high demand for rentals combined with the limited availability of affordable units makes it a challenging environment for both renters and landlords. #### Investor Angle From an investor’s perspective, the ZIP code 07601 presents mixed opportunities. While the high actual rents suggest strong potential for cash flow, the FMR constraints mean that landlords accepting Section 8 vouchers will receive significantly less rent compared to market rates. For example, a 2BR unit that could command $3,241 in rent would only bring in $2,500 under the FMR guidelines, a difference of $741 per month. To determine the investment grade, we must consider the financial viability of properties when rented at FMR rates. If we take into account the typical mortgage payment, property taxes, insurance, and maintenance costs, it becomes clear that renting at FMR rates may not be financially sustainable for many properties. For instance, a 2BR unit priced at $388,970 would typically require a mortgage payment of around $1,600 per month (assuming a 4.5% interest rate and a 20-year amortization period). Adding property taxes, insurance, and maintenance costs, the total expenses could easily exceed the FMR rent of $2,500. Therefore, the investment grade for this ZIP code is moderate to low for Section 8-focused investors due to the financial pressures of renting below market rates. Investors should carefully evaluate the cost structure of each property before committing to accepting Section 8 vouchers. #### Specific Actionable Insights 1. **Focus on Units Below 2BR**: Given the high price-to-FMR ratio, investors should focus on acquiring smaller units such as 0BR and 1BR apartments. These units have a lower FMR but are still in high demand. For example, a 1BR unit at $2,180 per month is more likely to cover operating costs compared to a 2BR unit at $2,500. 2. **Consider Mixed-Income Developments**: To balance the financial risks associated with Section 8 vouchers, investors might want to explore mixed-income developments where some units are rented at market rates and others are rented to voucher holders. This approach can help stabilize cash flows and reduce the risk of financial losses. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can provide insights into the demand for Section 8 units and potentially lead to more stable tenancies. This can mitigate some of the risks associated with renting below market rates. #### Bottom Line For Section 8-focused investors, the ZIP code 07601 (Hackensack, NJ) presents a challenging market due to the high price-to-FMR ratio and the financial pressures of renting below market rates. The recommendation for this ZIP code is to **Skip** unless you can find units that are significantly below the median market value or are able to implement a mixed-income strategy. The high demand for rentals and limited supply of affordable units make it difficult to achieve positive cash flow at FMR rates, especially for larger units.

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.