Location: Middlesex-Somerset-Hunterdon, NJ | Metro: Middlesex-Somerset-Hunterdon, 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 | $1,820 |
| 1 Bedroom | $1,960 |
| 2 Bedrooms | $2,440 |
| 3 Bedrooms | $2,910 |
| 4 Bedrooms | $3,260 |
| 5 Bedrooms | $3,782 |
| 6 Bedrooms | $4,236 |
| 7 Bedrooms | $4,575 |
| 8 Bedrooms | $4,804 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 3BR | $2,910 | $589,765 | 0.49% | F |
| 4BR | $3,260 | $787,039 | 0.41% | F |
U.S. Census Bureau data (2024)
ZIP 08809, located within the Middlesex-Somerset-Hunterdon, NJ HUD Metro FMR Area, serves as a strong cash-flow anchor for a Section 8 portfolio strategy. The Federal Market Rent (FMR) for the area in fiscal year 2024 is set at $2260, significantly above the market rent of $1782. This creates a spread that benefits landlords who can secure Section 8 tenants, ensuring a higher rental income compared to the local market rates.
The median home value in ZIP 08809 stands at $517,466, which indicates a relatively stable housing market. However, the primary focus for Section 8 landlords should be on the rental income stability provided by the government subsidy program. Given the high FMR relative to market rent, landlords can expect a consistent and reliable cash flow, making this ZIP code an ideal choice for those looking to stabilize their investment portfolio.
While ZIP 08809 has a 21.9% renter share and a median income of $131,250, these factors do not significantly influence the decision to classify it as a cash-flow anchor over an appreciation play or diversifier. The key consideration is the substantial difference between the FMR and the actual market rent, which ensures that landlords receive a higher guaranteed income through the Section 8 program.
To summarize, ZIP 08809 is best suited as a cash-flow anchor in a Section 8 portfolio due to the favorable spread between the HUD-set FMR ($2260) and the current market rent ($1782). This strategy allows landlords to mitigate risks associated with market fluctuations and ensures a steady stream of income from government-subsidized rents.
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.