Section 8 Fair Market Rent (FMR) for ZIP 07960 - 2027

Investment Score for ZIP 07960

Based on 1% Rule: A+ (≥1.5%) | A (≥1.2%) | B (≥1.0%) | C (≥0.8%) | D (≥0.6%) | F (<0.6%)

FY 2027 Fair Market Rent Rates

Unit Size	Monthly FMR
Studio	$2,450
1 Bedroom	$2,770
2 Bedrooms	$3,340
3 Bedrooms	$4,170
4 Bedrooms	$4,770
5 Bedrooms	$5,533
6 Bedrooms	$6,197
7 Bedrooms	$6,693
8 Bedrooms	$7,028

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
1BR	$2,770	$373,369	0.74%	D
2BR	$3,340	$611,237	0.55%	F
3BR	$4,170	$851,522	0.49%	F
4BR	$4,770	$1,076,384	0.44%	F
5BR	$5,533	$1,492,420	0.37%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 07960 (Morristown, NJ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for ZIP code 07960 in Morristown, NJ, for 2026 are as follows: - 0BR: $2370 - 1BR: $2680 - 2BR: $3240 - 3BR: $4060 - 4BR: $4610 These FMRs represent the maximum amount that a Section 8 voucher holder can pay towards rent. However, the actual rental market in Morristown is significantly higher. For instance, the Zillow median price for a 2BR property is $606,370, which translates to a monthly mortgage payment well above the FMR. The price-to-FMR ratio for a 2BR unit is 15.6x, indicating that the median home value is much higher than the rent subsidy provided by the government. This disparity creates significant constraints for voucher holders. They would need to find properties where the rent is below or equal to $3240 for a 2BR unit. Given the high median home values and the tight rental market, finding such properties could be challenging. #### Affordability & Renter Profile Morristown has a population of 46,702, with 37.5% of residents being renters. This suggests a substantial demand for rental housing. The occupancy rate stands at 97.5%, indicating that the market is very tight, with few vacancies available. Given the median household income of $160,334, it is clear that the area caters to a high-income demographic. The 2BR FMR represents only 24.2% of the median income, suggesting that most residents can afford to pay significantly more than the FMR. This makes it difficult for Section 8 voucher holders to find affordable units, as landlords may prefer tenants who can pay higher rents. #### Investor Angle From an investor perspective, the key question is whether properties can generate positive cash flow at the FMR levels. To assess this, we need to consider the cost of acquisition and the potential rental income. For a 2BR unit, the Zillow median price is $606,370. Assuming a typical mortgage rate of around 5% and a 20% down payment, the monthly mortgage payment would be approximately $2,526. Adding in other costs such as property taxes, insurance, and maintenance, the total monthly expenses could easily exceed $3240, the FMR for a 2BR unit. Therefore, relying solely on FMR to cover expenses would likely result in negative cash flow. The investment grade for this ZIP code would be considered low for Section 8-focused investors due to the high acquisition costs and the difficulty in finding properties that can be rented out at or below FMR levels while still generating positive cash flow. #### Specific Actionable Insights 1. **Target Lower-Rent Properties**: Investors should focus on acquiring properties with lower rent expectations, such as 0BR or 1BR units. The FMR for these units is $2370 and $2680 respectively, which might allow for better cash flow management compared to larger units. 2. **Consider Alternative Rental Markets**: Given the high price-to-FMR ratio, investors might want to explore alternative rental markets within the same county or nearby areas where the FMR is closer to the actual rental prices. This would increase the likelihood of finding properties that can be rented out profitably to Section 8 voucher holders. 3. **Utilize Government Programs**: Investors should look into other government programs that provide additional subsidies or incentives for affordable housing. These programs could help offset the financial burden of renting out properties at FMR levels. #### Bottom Line Based on the analysis, the recommendation for Section 8-focused investors in ZIP code 07960 is to **skip** this market. The high acquisition costs, tight rental market, and significant gap between FMR and actual rental prices make it challenging to achieve positive cash flow. Investors would be better served exploring other ZIP codes with more favorable conditions for Section 8 properties.

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.