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 | $1,680 |
| 1 Bedroom | $1,900 |
| 2 Bedrooms | $2,290 |
| 3 Bedrooms | $2,860 |
| 4 Bedrooms | $3,270 |
| 5 Bedrooms | $3,793 |
| 6 Bedrooms | $4,248 |
| 7 Bedrooms | $4,588 |
| 8 Bedrooms | $4,817 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,290 | $394,138 | 0.58% | F |
| 3BR | $2,860 | $515,999 | 0.55% | F |
| 4BR | $3,270 | $601,657 | 0.54% | F |
U.S. Census Bureau data (2024)
A skeptical investor looking into the ZIP code 07850 in Landing, NJ, might have several concerns regarding the feasibility of investing in properties under the Section 8 program. Here, we address these concerns with the data available.
Objection 1: Will the Fair Market Rent (FMR) of $2,030 for the fiscal year 2024 cover the mortgage on a home valued at $513,924?
The FMR figure represents the maximum amount that a landlord can charge for a Section 8 rental property. To determine if this covers the mortgage, consider the typical mortgage rates and terms. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly payment on a $513,924 home would be approximately $2,750. This means the FMR of $2,030 does not fully cover the mortgage payment. However, it's important to note that this calculation doesn't include property taxes, insurance, and maintenance costs, which are additional considerations in the overall financial equation. The FMR is designed to ensure housing is affordable for low-income families, not necessarily to cover all expenses for the landlord.
Objection 2: Is there enough renter demand at 16.6%?
The percentage of renter-occupied housing units at 16.6% suggests a relatively low demand for rental properties compared to owner-occupied units. However, this does not mean there isn't sufficient demand for Section 8 rentals. The demand for affordable housing remains high, and the 16.6% figure reflects the broader rental market, not specifically the subsidized rental market. For investors focusing solely on Section 8, the demand could still be robust due to the guaranteed income stream from the government. Yet, the data does not provide specifics on the number of households eligible for Section 8 assistance, so a comprehensive assessment of demand requires further investigation beyond the given data.
Objection 3: Will vouchers keep pace with market rents of $1,730?
The voucher amount is set to match the FMR, which in this case is $2,030 for fiscal year 2024. Given that the market rent is currently $1,730, the voucher amount exceeds the current market rent, providing a buffer against inflation and rising costs. However, it's critical to monitor the local rental market trends to ensure that future increases in market rents align with adjustments in the FMR. If the market rents rise faster than the FMR, landlords might find themselves in a position where the voucher amount no longer adequately compensates for the rent they could otherwise receive. The data does not provide historical trends or projections, making it necessary to consult additional sources for a complete picture.
In summary, while the FMR of $2,030 for ZIP 07850 may not fully cover the mortgage on a $513,924 home, it does offer a stable income source. The 16.6% renter occupancy rate indicates a smaller overall rental market but does not necessarily reflect the specific demand for Section 8 rentals. Lastly, the current voucher amount exceeds the market rent, offering some security against immediate rent hikes, though long-term sustainability depends on future market conditions and FMR adjustments.
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.