Location: Newark, NJ | Metro: Newark, 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 | $1,620 |
| 1 Bedroom | $1,830 |
| 2 Bedrooms | $2,210 |
| 3 Bedrooms | $2,760 |
| 4 Bedrooms | $3,150 |
| 5 Bedrooms | $3,654 |
| 6 Bedrooms | $4,092 |
| 7 Bedrooms | $4,419 |
| 8 Bedrooms | $4,640 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,210 | $386,278 | 0.57% | F |
| 3BR | $2,760 | $537,467 | 0.51% | F |
| 4BR | $3,150 | $775,001 | 0.41% | F |
U.S. Census Bureau data (2024)
A skeptical investor might question whether the Fair Market Rent (FMR) of $2,090 for ZIP code 07849 (Lake Hopatcong, NJ) in fiscal year 2024 will sufficiently cover the mortgage on a home priced at $518,457. The FMR represents the maximum amount that a tenant can be charged under the Section 8 program. To determine if this FMR covers the mortgage, one must consider the interest rate and term of the loan. Assuming a 30-year fixed-rate mortgage with an average interest rate of around 5%, the monthly payment on a $518,457 home would be approximately $2,800. Therefore, the FMR of $2,090 does not fully cover the mortgage payment, leaving a gap of about $710 per month.
The next concern could be the level of demand from renters in Lake Hopatcong, given the rental vacancy rate of 8.8%. An 8.8% vacancy rate suggests that there is moderate competition among landlords, but it also indicates that there is sufficient demand to fill most units over time. This rate is slightly higher than the national average, which was around 6.5% in recent years, but it remains within a range where landlords can expect steady occupancy without significant difficulty in leasing units.
Lastly, an investor might worry about whether the Housing Choice Voucher Program (Section 8) will keep up with the market rents, currently at $1,734. While the FMR is set at $2,090, the actual voucher payment may not always reach this figure. It's crucial to monitor local housing authority policies and funding levels to ensure that they can cover the necessary rent. In ZIP 07849, the FMR is above the market rent, which provides some cushion; however, the effectiveness of the voucher program depends on the local housing authority's ability to fund the vouchers adequately.
In summary, while the FMR of $2,090 does not fully cover the mortgage on a $518,457 home, it still offers a substantial portion of the required monthly payment. The rental vacancy rate of 8.8% suggests a manageable level of competition, and the FMR exceeding the market rent of $1,734 provides some assurance that voucher payments can help stabilize cash flow. However, ongoing monitoring of local housing authority policies and market conditions is essential for success in this area.
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.