Section 8 Fair Market Rent (FMR) for ZIP 07726 - 2027

Investment Score for ZIP 07726

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	$1,810
1 Bedroom	$2,000
2 Bedrooms	$2,470
3 Bedrooms	$3,170
4 Bedrooms	$3,510
5 Bedrooms	$4,072
6 Bedrooms	$4,561
7 Bedrooms	$4,926
8 Bedrooms	$5,172

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,000	$300,540	0.67%	D
2BR	$2,470	$399,096	0.62%	D
3BR	$3,170	$700,867	0.45%	F
4BR	$3,510	$916,726	0.38%	F
5BR	$4,072	$1,118,040	0.36%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 07726 (Manalapan Township, NJ) #### Introduction Manalapan Township, located in Monmouth County, New Jersey, is a high-income suburban area with a population of 44,764. The median household income in this ZIP code is notably high at $149,197, which places it among the most affluent areas in the state. With only 11.1% of the population renting, the rental market is relatively small but highly competitive. This analysis will focus on the dynamics of the Section 8 voucher program, affordability for renters, the investor angle, and actionable insights for those interested in investing in this market. #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for Manalapan Township is set by HUD for 2026 as follows: - 0BR: $1780 - 1BR: $2000 - 2BR: $2470 (which is 19.9% of the median income) - 3BR: $3230 - 4BR: $3580 These figures represent the maximum amount that landlords can charge tenants who receive Section 8 vouchers. However, comparing these FMRs to actual rents provides insight into the challenges faced by voucher holders. For instance, the Zillow median price for a 2BR property is $389,420, which translates to a monthly mortgage payment of approximately $1,622 if financed at a 4.5% interest rate over 30 years. Adding property taxes, insurance, and maintenance costs, the total monthly expense could easily exceed the FMR of $2470. Therefore, voucher holders are constrained to finding units that do not exceed the FMR, which can be difficult given the high cost of living in this area. #### Affordability & Renter Profile Given the high median household income and the low renter percentage, the rental market in Manalapan Township is tight. The occupancy rate of 96.9% indicates that there is little vacancy, making it a seller's market where landlords have significant leverage. The high price-to-FMR ratio of 13.1x for a 2BR unit suggests that properties are significantly overpriced relative to the FMR, making it challenging for low-income renters to find affordable housing options. The typical renter in this ZIP code likely has a higher income than the average Section 8 recipient, given the overall affluence of the area. The median income of $149,197 means that even a 2BR unit priced at the FMR represents a small portion of their income, at just 19.9%. This further underscores the difficulty for lower-income individuals to find suitable housing within the voucher limits. #### Investor Angle From an investor perspective, the key question is whether properties rented at FMR levels can generate positive cash flow. Given the high property values and associated expenses, it is unlikely that a 2BR unit rented at $2470 would cover all costs and provide a profit margin. To illustrate, let’s break down the potential costs: - Monthly mortgage payment: $1,622 - Property taxes: Approximately $2,000 annually or $167 monthly - Insurance: Around $100 monthly - Maintenance and utilities: Another $100-$200 monthly Total monthly expenses would be around $2,000-$2,100, leaving little room for profit at the FMR level. Additionally, the high price-to-FMR ratio of 13.1x implies that the market is overvalued compared to the FMR, making it less attractive for investors seeking to maximize returns through rental income. #### Investment Grade Considering the tight rental market and the high costs associated with owning property in Manalapan Township, the investment grade for Section 8-focused investors is relatively low. The primary constraint is the limited number of units that fall within the FMR range, coupled with the high expenses required to maintain such properties. Moreover, the competition for rental units is fierce, and landlords may prefer higher-paying tenants over those with vouchers. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Investors should consider focusing on 0BR or 1BR units, which have FMRs of $1780 and $2000 respectively. These units are more likely to be affordable for voucher holders and may offer better cash flow opportunities due to lower acquisition and maintenance costs. 2. **Consider Multi-Family Properties**: Single-family homes may be too expensive for Section 8 tenants, but multi-family properties might offer more flexibility. A 2BR unit in a multi-family complex could potentially be rented at a slightly lower rate, making it more feasible for voucher holders. Additionally, the economies of scale in managing multiple units could improve profitability. 3. **Engage with Local Housing Authorities**: Building relationships with local housing authorities can help investors stay informed about changes in the FMR and the availability of vouchers. This can also provide opportunities to participate in programs that offer incentives for landlords who accept Section 8 tenants. #### Bottom Line Based on the provided data, the recommendation for Section 8-focused investors in ZIP 07726 is to **Skip** this market. The high property values, tight rental market, and limited number of units that fall within the FMR range make it challenging to achieve positive cash flow. While there are some actionable insights, the overall environment is not conducive to profitable Section 8 investments. This analysis is grounded in the specific data points provided, including the high median income, low renter percentage, and the tight rental market conditions. The conclusion is that the ZIP code is not an ideal location for Section 8-focused real estate investments.

Data Sources: FMR data from HUD (2027). Median home prices from Zillow (2026-07-31). 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.