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 | $2,070 |
| 1 Bedroom | $2,330 |
| 2 Bedrooms | $2,670 |
| 3 Bedrooms | $3,240 |
| 4 Bedrooms | $4,090 |
| 5 Bedrooms | $4,744 |
| 6 Bedrooms | $5,313 |
| 7 Bedrooms | $5,738 |
| 8 Bedrooms | $6,025 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,670 | $527,501 | 0.51% | F |
| 3BR | $3,240 | $820,435 | 0.39% | F |
| 4BR | $4,090 | $951,852 | 0.43% | F |
U.S. Census Bureau data (2024)
A skeptical investor considering investing in ZIP 07605, Leonia, NJ, might raise several concerns regarding the feasibility of renting out properties under the Section 8 program. Here are some common objections and their corresponding analyses based on available data.
Objection 1: Will the Fair Market Rent (FMR) of $1,960 for ZIP 07605 in fiscal year 2024 cover the mortgage on an average-priced home valued at $807,623?
The FMR of $1,960 does not directly correlate with covering the mortgage on a home valued at $807,623. To accurately assess whether the FMR can cover the mortgage, one must consider the specific mortgage terms, including interest rate and loan duration. However, given the high property values in Leonia, it is unlikely that the FMR alone will sufficiently cover a mortgage payment on an $807,623 home without additional income sources or significant equity. This indicates that relying solely on Section 8 for rental income may not be financially viable for high-value homes.
Objection 2: Is there sufficient renter demand at 30.5% of the population being renters?
The rental market in Leonia appears to be modestly sized, with only 30.5% of the population being renters. While this percentage suggests there is some demand, it also implies that the competition for tenants could be relatively low compared to areas with higher percentages of renters. The limited rental market may mean slower lease-up times and potentially fewer options for finding suitable tenants. Therefore, an investor should expect a smaller pool of potential Section 8 tenants in this ZIP code.
Objection 3: Will voucher amounts keep pace with the $2,045 market rents?
The FMR set by HUD at $1,960 is below the current market rent of $2,045. This discrepancy means that landlords may need to absorb the difference between the voucher amount and the market rent, which could result in a financial loss. It is important to note that voucher amounts are typically adjusted annually but do not always reflect the rapid changes in market rents. As such, there is a risk that the voucher amount will lag behind the increasing market rents, creating a challenge for landlords to maintain profitability.
In summary, while Leonia offers certain advantages, such as its location and amenities, the data raises significant questions about the financial viability of Section 8 rentals in this ZIP code. The high cost of housing, limited rental market, and potential gap between voucher amounts and market rents are critical factors that any investor must carefully consider before proceeding.
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.