Location: Cape May County, NJ | Metro: Cape May 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 | $1,790 |
| 2 Bedrooms | $2,180 |
| 3 Bedrooms | $2,850 |
| 4 Bedrooms | $2,870 |
| 5 Bedrooms | $3,329 |
| 6 Bedrooms | $3,728 |
| 7 Bedrooms | $4,026 |
| 8 Bedrooms | $4,227 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $2,180 | $1,011,117 | 0.22% | F |
| 3BR | $2,850 | $1,632,777 | 0.17% | F |
| 4BR | $2,870 | $3,217,397 | 0.09% | F |
| 5BR | $3,329 | $5,000,801 | 0.07% | F |
U.S. Census Bureau data (2024)
The Section 8 cap-rate analysis for ZIP code 08247, Stone Harbor, New Jersey, reveals a stark contrast between the federally mandated Fair Market Rent (FMR) and the local market rent conditions. Using the annualized figures for a two-bedroom unit, the FMR stands at $1630 per month, while the market rent is $1,711 per month according to the Census ACS.
Given the median home value in the area is $2,482,050, let's calculate the gross yield for both scenarios. For the FMR scenario, the annual rental income would be $19,560 ($1630 x 12 months), leading to a gross yield of approximately 0.79%. In contrast, using the market rent figure, the annual rental income increases to $20,532 ($1,711 x 12 months), resulting in a gross yield of about 0.83%.
The difference between these yields is marginal, but the market rent scenario offers a slightly higher return. However, considering the 10.1% renter density in Stone Harbor, it becomes evident that the market rent scenario is more realistic. A lower renter density implies fewer potential tenants, making it challenging to consistently lease properties at market rates. The N/A-day DOM (Days on Market) suggests that there isn't enough data to determine how quickly units are leased, which could indicate variability in the leasing process. Despite this, the slight edge in gross yield from the market rent scenario makes it the more practical option for investors looking to maximize returns within the constraints of Section 8 participation.
In conclusion, while the FMR provides a stable income source guaranteed by the government, the market rent offers a better gross yield, albeit with potential challenges in tenant acquisition due to the low renter density. Investors should weigh these factors carefully when deciding whether to participate in the Section 8 program in Stone Harbor.
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.