Location: Warren County, NJ | Metro: Warren County, 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 | $2,180 |
| 1 Bedroom | $2,190 |
| 2 Bedrooms | $2,730 |
| 3 Bedrooms | $3,350 |
| 4 Bedrooms | $3,970 |
| 5 Bedrooms | $4,605 |
| 6 Bedrooms | $5,158 |
| 7 Bedrooms | $5,571 |
| 8 Bedrooms | $5,850 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $3,350 | $503,026 | 0.67% | D |
| 4BR | $3,970 | $600,430 | 0.66% | D |
U.S. Census Bureau data (2024)
The analysis for ZIP code 07838 reveals an interesting picture regarding the potential returns for landlords and small-portfolio investors involved in Section 8 housing programs. The Fair Market Rent (FMR) for a 2-bedroom apartment in this area, as set by HUD for fiscal year 2024, is $1940 per month. This translates into an annual rental income of $23,280 when considering a full-year occupancy. Against the median home value of $475,873, this implies a gross yield of approximately 4.9%. The calculation is straightforward: $23,280 divided by $475,873.
In contrast, the market rent for a similar 2-bedroom property, according to the Census ACS, stands at $1,927 per month. This yields an annual rental income of $23,124, resulting in a slightly lower gross yield of about 4.9%. Thus, there is virtually no difference in the gross yield between the Section 8 FMR and the market rent for this particular ZIP code.
Given the 11.7% renter density in ZIP 07838, it's important to note that the demand for rental properties is relatively low. However, this does not necessarily mean that the gross yields calculated above are unrealistic. The lack of data on Days on Market (DOM) suggests either a stable rental market where units are filled promptly, or a less dynamic market where listings remain available for longer periods without significant impact on overall rental rates.
The key consideration for investors is the reliability of the rental income. Section 8 housing provides a guaranteed source of income through government subsidies, which can be particularly attractive in a low-renter-density environment. While the gross yields are nearly identical, the stability offered by Section 8 might tip the scales in favor of participating in the program. It's also worth noting that the analysis assumes full-year occupancy, which may vary based on individual circumstances and local market conditions.
To summarize, the gross yields for both Section 8 FMR and market rent in ZIP 07838 are approximately 4.9%, making them comparable. The decision to participate in the Section 8 program should be made after considering the stability of income versus the potential challenges of managing a lower-density rental market.
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.