Location: Monmouth-Ocean, NJ | Metro: Monmouth-Ocean, 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 | $1,800 |
| 1 Bedroom | $1,990 |
| 2 Bedrooms | $2,460 |
| 3 Bedrooms | $3,150 |
| 4 Bedrooms | $3,490 |
| 5 Bedrooms | $4,048 |
| 6 Bedrooms | $4,534 |
| 7 Bedrooms | $4,897 |
| 8 Bedrooms | $5,142 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,990 | $371,510 | 0.54% | F |
| 2BR | $2,460 | $556,902 | 0.44% | F |
| 3BR | $3,150 | $749,885 | 0.42% | F |
| 4BR | $3,490 | $933,833 | 0.37% | F |
U.S. Census Bureau data (2024)
The economics of Section 8 in ZIP code 07732, which covers Highlands, NJ, in Monmouth County, can be dissected into several key components to provide clarity for landlords and small-portfolio investors. The SAFMR (Small Area Fair Market Rent) for a two-bedroom apartment in this ZIP code for FY 2024 is set at $1750. This figure is specifically tailored for this ZIP code, meaning it reflects the rental rates unique to Highlands, NJ.
Local market rents, however, are significantly higher, with a ZORI (Zillow Observed Rent Index) of $3,708 for a two-bedroom unit. This substantial difference between the SAFMR and the actual market rent creates a scenario where landlords must carefully consider the financial implications of accepting a Section 8 tenant.
A Section 8 voucher in ZIP 07732 will cover the SAFMR amount, but the total reimbursement also includes the tenant's portion of the rent and utility allowances. The tenant is responsible for paying 30% of their adjusted income towards rent. Utility allowances vary based on the size of the apartment and the season, but they typically range from $200 to $300 per month for a two-bedroom unit.
To illustrate, if a tenant's adjusted income is $2,000 per month, their contribution would be $600 (30% of $2,000). Assuming an average utility allowance of $250, the total reimbursement for a landlord would be the sum of the SAFMR ($1750), the tenant's contribution ($600), and the utility allowance ($250), totaling $2600 per month.
This means that the typical reimbursement gap for a two-bedroom apartment in ZIP 07732 is $1108 per month, given the local market rent of $3,708. Landlords must weigh this gap against the benefits of having a steady, government-backed rent payment.
In summary, while the SAFMR for a two-bedroom apartment in ZIP 07732 is $1750, the actual reimbursement to landlords from a Section 8 voucher, including the tenant's contribution and utility allowances, is approximately $2600. This leaves a significant gap of $1108 compared to the local market rent of $3,708.
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.