Section 8 Fair Market Rent (FMR) for ZIP 07731 - 2027

Investment Score for ZIP 07731

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	$2,350
1 Bedroom	$2,600
2 Bedrooms	$3,210
3 Bedrooms	$4,120
4 Bedrooms	$4,560
5 Bedrooms	$5,290
6 Bedrooms	$5,925
7 Bedrooms	$6,399
8 Bedrooms	$6,719

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	$2,600	$326,960	0.8%	D
2BR	$3,210	$401,457	0.8%	D
3BR	$4,120	$620,672	0.66%	D
4BR	$4,560	$749,234	0.61%	D
5BR	$5,290	$838,869	0.63%	D

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 07731 (Howell, NJ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 07731 (Howell, NJ) in 2026 indicate that a two-bedroom unit should rent for $3,010 per month. However, the Zillow median price for a two-bedroom home is $392,655, which translates to a price-to-FMR ratio of 10.9x. This suggests that actual rental prices are significantly higher than the FMR. For instance, a typical two-bedroom unit might cost around $392,655 if purchased outright, but renting it would likely be closer to $3,600 per month based on the price-to-FMR ratio. This creates a significant constraint for voucher holders. The maximum allowable rent under a Section 8 voucher for a two-bedroom unit is $3,010, which is only about 83.6% of the estimated market rent. Therefore, voucher holders are limited to a smaller pool of properties that fall within the FMR guidelines. Additionally, landlords may be hesitant to accept vouchers due to the higher market rents they can command, leading to fewer options for tenants using Section 8 assistance. #### Affordability & Renter Profile Howell, NJ has a population of 40,322, with a median household income of $134,056. Only 11.7% of the population are renters, indicating a primarily owner-occupied market. The occupancy rate is high at 97.6%, suggesting that the housing stock is largely utilized, and there is little vacancy. Given the relatively low percentage of renters and the high median income, those who do rent are likely to be financially stable individuals or families who can afford higher rents. The tight market dynamics mean that there is strong competition for rental units, particularly among those without financial assistance. As such, the demand for affordable rentals is lower compared to other areas with higher renter populations. #### Investor Angle From an investor perspective, the ZIP code 07731 presents a challenging scenario when considering cash flow based on FMR. With the FMR for a two-bedroom unit set at $3,010, this represents only 26.9% of the median household income, indicating that the rent is relatively affordable for local residents. However, the actual market rent is much higher, at approximately $3,600 per month, which means that accepting Section 8 vouchers could result in a loss of potential revenue. To determine whether this ZIP code is cash-flow positive at FMR, we need to consider the costs associated with owning and maintaining a rental property. Assuming a conservative estimate of 1% annual property tax, 1% maintenance, and 1% insurance, the total monthly cost for a two-bedroom unit priced at $392,655 would be around $1,000. Adding in mortgage payments (assuming a 30-year fixed-rate mortgage at 5% interest), the monthly cost would rise to approximately $1,800. Thus, even at the FMR of $3,010, the cash flow would be positive by about $1,210 per month. However, the investment grade is likely to be lower due to the limited pool of potential tenants who can use Section 8 vouchers and the possibility of landlords preferring higher-paying market-rate tenants. This means that while the cash flow is positive, the overall return on investment (ROI) may be less attractive compared to other markets where voucher usage is more prevalent. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors should focus on smaller units such as one-bedroom apartments, which have an FMR of $2,440. This is still below the estimated market rent, but the gap is narrower, making it more feasible for landlords to accept vouchers. Additionally, the one-bedroom FMR represents 18.2% of the median income, making it more affordable for local residents. 2. **Consider Property Location**: Investors should carefully evaluate the location of properties within Howell, NJ. Areas with higher concentrations of lower-income residents or those near public transportation hubs may have a higher likelihood of attracting voucher holders. This can help mitigate the risk of having vacant units. 3. **Negotiate with Local Landlords**: Since the market is tight and competition for rentals is high, negotiating with local landlords to accept vouchers may be beneficial. Offering incentives such as guaranteed rental income or assistance with tenant screening could make the proposition more appealing. #### Bottom Line For Section 8-focused investors, the ZIP code 07731 (Howell, NJ) presents a mixed picture. While the cash flow is positive at FMR, the limited pool of voucher users and the high market rents suggest that this is not an ideal market for maximizing returns through Section 8 vouchers. Therefore, the recommendation is to **Hold** or **Skip** this ZIP code unless you can find properties in highly desirable locations that are more likely to attract voucher holders. If you decide to invest, focusing on smaller units like one-bedroom apartments would be more strategic given the current market conditions.

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.