Section 8 Fair Market Rent (FMR) for ZIP 08861 - 2027

Investment Score for ZIP 08861

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	$1,680
1 Bedroom	$1,800
2 Bedrooms	$2,250
3 Bedrooms	$2,690
4 Bedrooms	$3,010
5 Bedrooms	$3,492
6 Bedrooms	$3,911
7 Bedrooms	$4,224
8 Bedrooms	$4,435

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
2BR	$2,250	$385,476	0.58%	F
3BR	$2,690	$483,809	0.56%	F
4BR	$3,010	$542,710	0.55%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 08861 (Perth Amboy, NJ) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 08861 in Perth Amboy, NJ, is set by HUD for the year 2026. The FMRs are as follows: - 0BR: $1510 - 1BR: $1660 - 2BR: $2080 (which is 38.7% of the median household income) - 3BR: $2490 - 4BR: $2760 These figures represent the maximum rent that a Section 8 voucher holder can pay. However, the actual rental market in Perth Amboy is significantly higher. For instance, the Zillow median price for a 2BR unit is $384,739, which translates to a monthly rental cost of approximately $1519 based on typical mortgage rates and property taxes. This implies that the actual rental costs far exceed the FMRs, creating a significant constraint for voucher holders. They would likely struggle to find units that fit within their budget, especially since the price-to-FMR ratio for a 2BR unit is 15.4x, indicating that the market rents are much higher than the FMRs. #### Affordability & Renter Profile Perth Amboy has a population of 59,351, with a median household income of $64,491. A notable 62.5% of the population are renters, suggesting a strong demand for rental properties. The occupancy rate of 97.3% indicates that the housing market is tight, with very few vacant units available. Given that 2BR units at the FMR level only account for 38.7% of the median income, it is clear that many residents are facing affordability challenges. The high percentage of renters and the tight occupancy rate suggest that there is a significant need for affordable housing options, particularly for those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the key question is whether the ZIP code offers cash-flow positive opportunities at the FMR levels. Based on the data provided, the answer is generally negative. The Zillow median price for a 2BR unit is $384,739, which would translate into a monthly rental cost of around $1519. This is already above the FMR of $2080 for a 2BR unit. When considering the additional costs associated with property ownership such as maintenance, insurance, and property taxes, it becomes evident that operating at the FMR levels would not be financially viable for most investors. The investment grade for this ZIP code would be low due to the mismatch between market rents and FMRs. Investors looking to generate positive cash flow would need to consider alternative strategies, such as targeting properties with below-market rents or seeking subsidies and incentives to offset the lower rental income. #### Specific Actionable Insights 1. **Target Below-Market Rents:** Investors should focus on acquiring properties where the rent is already below the market rate but still within the FMR range. For example, a 2BR unit renting for $1800 per month would be attractive to Section 8 voucher holders while also offering a potential profit margin if the acquisition price is reasonable. 2. **Utilize Subsidies and Incentives:** Given the high cost of living and the tight rental market, investors should explore government programs and local incentives designed to support affordable housing. These could include tax breaks, grants, or other financial assistance that can help bridge the gap between market rents and FMRs. 3. **Consider Property Rehabilitation:** There might be opportunities to purchase distressed properties at a lower price and rehabilitate them to meet the needs of Section 8 voucher holders. By investing in renovations and bringing the property up to standard, investors can potentially command higher rents within the FMR limits. #### Bottom Line Given the high price-to-FMR ratio and the tight rental market, the recommendation for Section 8-focused investors is to **Skip** this ZIP code unless they have access to substantial subsidies or can acquire properties at a significantly discounted price. The mismatch between market rents and FMRs makes it challenging to achieve positive cash flow without taking on additional financial risks or leveraging external support mechanisms.

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.