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 | $2,380 |
| 1 Bedroom | $2,690 |
| 2 Bedrooms | $3,250 |
| 3 Bedrooms | $4,050 |
| 4 Bedrooms | $4,640 |
| 5 Bedrooms | $5,382 |
| 6 Bedrooms | $6,028 |
| 7 Bedrooms | $6,510 |
| 8 Bedrooms | $6,836 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $2,690 | $424,775 | 0.63% | D |
| 2BR | $3,250 | $603,767 | 0.54% | F |
| 3BR | $4,050 | $1,152,146 | 0.35% | F |
| 4BR | $4,640 | $1,618,139 | 0.29% | F |
| 5BR | $5,382 | $2,413,705 | 0.22% | F |
U.S. Census Bureau data (2024)
The Section 8 program in ZIP code 07928, which covers parts of Chatham, NJ, presents an interesting dynamic for landlords and small-portfolio investors. The Fair Market Rent (FMR) set by HUD for the fiscal year 2024 is $2820, while the actual market rent, as measured by Zillow's ZORI index, stands at $3021. This creates a gap of $191, or approximately 6.77%, between the two figures.
Given that the FMR is lower than the market rent, landlords should be aware of the potential costs associated with housing voucher tenants at rates below the open-market level. Accepting Section 8 tenants means agreeing to receive a fixed rental amount determined by HUD, which in this case is $2820. This could result in a financial shortfall if compared to what you might charge a non-voucher tenant, who would pay closer to the market rate of $3021.
In Chatham, NJ, where only 16.7% of residents are renters, the competition for tenants can be fierce. With a median home value of $1,311,035 and a median income of $220,982, it's clear that the area is predominantly composed of homeowners with relatively high incomes. This context suggests that landlords must carefully consider their tenant mix and rental strategies to maximize yields.
While the gap between FMR and market rent may seem small, it can significantly impact your bottom line when compounded over multiple units. For example, if you manage five properties in this ZIP code, the total annual shortfall due to accepting Section 8 vouchers would be $9,550 ($191 x 5 x 12 months).
To put this into perspective, let's examine the implications further:
The difference in rent amounts can affect cash flow and profitability, especially in a market where property values are high and maintenance costs can be significant.
However, Section 8 tenants often provide stability and timely payments, which can offset the lower rent rates. Additionally, the demand for affordable housing remains steady, making these vouchers attractive to some landlords.
In conclusion, the decision to accept Section 8 vouchers in ZIP 07928 should be made with a clear understanding of the financial gap and the broader economic context of Chatham, NJ. While there is a risk of reduced rental income, the benefits of stable tenancy and the local demand for affordable housing must also be weighed.
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.