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 | $1,720 |
| 1 Bedroom | $1,930 |
| 2 Bedrooms | $2,220 |
| 3 Bedrooms | $2,700 |
| 4 Bedrooms | $3,400 |
| 5 Bedrooms | $3,944 |
| 6 Bedrooms | $4,417 |
| 7 Bedrooms | $4,770 |
| 8 Bedrooms | $5,009 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,700 | $736,563 | 0.37% | F |
| 4BR | $3,400 | $815,801 | 0.42% | F |
U.S. Census Bureau data (2024)
The analysis of the Section 8 cap-rate picture for ZIP code 07646 reveals a significant disparity between the federally determined Fair Market Rent (FMR) and the actual market rent levels. For a two-bedroom unit, the annualized FMR set by the government for FY 2024 is $1840, while the Census ACS reports the market rent at $1765 per month.
To understand the implications of these figures, we must first calculate the gross yields based on the median home value of $728,327. The gross yield from Section 8 rental income would be approximately 2.53% ($1840 * 12 / $728,327), whereas the gross yield from market rent would be slightly lower at 2.41% ($1765 * 12 / $728,327).
The difference between these two gross yields is minimal, but it's important to note that the Section 8 scenario is more stable and less susceptible to market fluctuations. However, given the 38.6% renter density in ZIP 07646, it suggests a moderate demand for rentals. The N/A-day Days on Market (DOM) indicates that data on how long properties typically stay on the market before being rented out is unavailable, which could imply either very quick or very slow rental turnovers depending on other factors.
In conclusion, while the gross yields from both scenarios are close, the stability of Section 8 rents makes them a more reliable investment option in ZIP 07646. The slight edge in yield from market rent does not necessarily outweigh the potential risks and uncertainties associated with fluctuating market conditions. Landlords and small-portfolio investors should consider the balance between yield and stability when making their investment decisions.
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.