Location: Newark, 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 | $1,770 |
| 1 Bedroom | $2,000 |
| 2 Bedrooms | $2,410 |
| 3 Bedrooms | $3,010 |
| 4 Bedrooms | $3,440 |
| 5 Bedrooms | $3,990 |
| 6 Bedrooms | $4,469 |
| 7 Bedrooms | $4,827 |
| 8 Bedrooms | $5,068 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,000 | $282,507 | 0.71% | D |
| 2BR | $2,410 | $352,868 | 0.68% | D |
| 3BR | $3,010 | $480,768 | 0.63% | D |
| 4BR | $3,440 | $555,691 | 0.62% | D |
U.S. Census Bureau data (2024)
Skeptical investors looking into ZIP 07874, Stanhope, NJ, often raise several key concerns regarding the feasibility of investing in the area under the Section 8 program. These objections revolve around the financial viability of covering mortgages, the strength of renter demand, and the adequacy of voucher payments compared to market rents.
Will Fair Market Rent (FMR) of $2330 cover the mortgage on a $441,346 home?
The Fair Market Rent (FMR) set by HUD for ZIP 07874 in fiscal year 2024 is $2330 per month. To determine if this will sufficiently cover a mortgage on a home priced at $441,346, we must consider the prevailing interest rates and typical down payment percentages. Assuming a 20% down payment and an average interest rate of 4%, the monthly mortgage payment would be approximately $1900. Therefore, the FMR of $2330 can indeed cover the mortgage on such a home, leaving a buffer of $430 per month before taxes, insurance, and maintenance costs are considered.
Is there enough renter demand at 7.6%?
The rental vacancy rate in ZIP 07874 stands at 7.6%. This figure indicates that while there is some competition among landlords, it is not excessively high. A vacancy rate below 10% generally suggests a stable rental market. However, the data does not provide a comprehensive picture of the number of renters seeking housing or the specific demand for Section 8 properties. To fully assess demand, one would need to examine local demographics, employment trends, and the availability of alternative housing options.
Will vouchers keep pace with $1763 market rents?
The market rent for a two-bedroom apartment in ZIP 07874 is $1763. The FMR of $2330 is designed to reflect what a typical unit should cost, which includes a margin above the actual market rent to account for administrative costs and potential increases. In this case, the voucher amount is expected to exceed the market rent, ensuring that landlords receive a competitive rate. However, the data does not specify future adjustments to the FMR, so long-term alignment with market rents cannot be guaranteed without further analysis.
In conclusion, ZIP 07874 presents a viable opportunity for Section 8 investors. The FMR adequately covers the mortgage on a home valued at $441,346, and the rental vacancy rate suggests a manageable level of competition. While vouchers currently exceed market rents, ongoing monitoring of both FMR adjustments and market conditions is advised to ensure sustained profitability.
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.