Location: Monmouth-Ocean, NJ | Metro: Monmouth-Ocean, 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 | $1,500 |
| 1 Bedroom | $1,660 |
| 2 Bedrooms | $2,050 |
| 3 Bedrooms | $2,630 |
| 4 Bedrooms | $2,910 |
| 5 Bedrooms | $3,376 |
| 6 Bedrooms | $3,781 |
| 7 Bedrooms | $4,083 |
| 8 Bedrooms | $4,287 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,660 | $151,348 | 1.1% | B |
| 2BR | $2,050 | $254,936 | 0.8% | C |
| 3BR | $2,630 | $656,494 | 0.4% | F |
| 4BR | $2,910 | $810,853 | 0.36% | F |
| 5BR | $3,376 | $1,103,312 | 0.31% | F |
U.S. Census Bureau data (2024)
Lakewood, NJ (ZIP 08701) serves as a distinct regional hub characterized by a high density of educational institutions and a rapidly expanding Orthodox Jewish community. The local economy is heavily influenced by major private schools and yeshivas, including Beth Medrash Govoha, which is one of the largest Talmudic academies in the United States and a primary driver of the area's housing demand. Neighborhoods in this ZIP code generally feature a mix of single-family homes and multi-unit properties, with a development pattern that accommodates large families seeking proximity to religious and communal amenities.
From a financial perspective, the gap between subsidy caps and market rates requires careful attention. The HUD Fair Market Rent (FMR) for a 2-bedroom unit in FY2024 is $1,610, while the FY2026 ladder projects a 2BR FMR of $2,030. However, current market rents (Zillow ZORI) sit at $2,310, creating a potential shortfall of $280 per month against the projected FMR. Investors should note the median home value is $576,072, with properties moving relatively quickly at a median of 47 days on market. The median 2BR sale price is $249,601, which suggests different asset classes perform differently in this market.
The tenant pool is substantial, with 48.5% of households renting and a median household income of $64,959. This income level relative to high home values suggests strong pressure on the rental market. While voucher demand is likely steady given the renter share, investors must account for local regulations regarding occupancy and zoning, which are often significant in this municipality. Access to major employers and the internal economy driven by the educational sector supports occupancy, though public school ratings may be less relevant to the primary demographic.
The Section 8 verdict for 08701 is cautious: cash flow is possible on smaller units or older stock, but the gap between the FY2026 FMR ($2,030) and market rent ($2,310) means standard vouchers may not cover top-of-market renovations. The strongest angle here is stability and high occupancy demand driven by the unique demographic concentration rather than arbitrage between HUD payments and market rates. Investors should target properties priced well below the $576,072 median value to ensure the $1,610-$2,030 rent range covers debt service adequately.
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.