Section 8 Fair Market Rent (FMR) for ZIP 08904 - 2027

Location: Middlesex-Somerset-Hunterdon, NJ | Metro: Middlesex-Somerset-Hunterdon, NJ HUD Metro FMR Area

Investment Score for ZIP 08904

N/A

Monthly Rent (2BR)

$2,610

Median Price (2BR)

$N/A

1% Rule

Annual Yield

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	$1,940
1 Bedroom	$2,090
2 Bedrooms	$2,610
3 Bedrooms	$3,110
4 Bedrooms	$3,490
5 Bedrooms	$4,048
6 Bedrooms	$4,534
7 Bedrooms	$4,897
8 Bedrooms	$5,142

Investment Analysis by Bedroom Size

Zillow median home prices vs Section 8 FMR rates (Data: 2026-07-31)

Bedrooms	Monthly FMR	Median Price	1% Rule	Grade
3BR	$3,110	$585,455	0.53%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Population

15,121

Median Household Income

$104,694

Housing Units

6,759

Renter Percentage

59.7%

Occupancy Rate

95.2%

Renter Occupied

3,843

The analysis of the Section 8 program in ZIP code 08904 reveals a significant gap between the Fair Market Rent (FMR) set at $2210 for fiscal year 2024 and the actual market rent, which stands at $2335 according to the Zillow Observed Rent Index (ZORI). This discrepancy amounts to a difference of $125, or approximately 5.65%, indicating that landlords who participate in the Section 8 program will be renting their properties below the open-market rates.

In this context, where 59.7% of residents are renters and the median home value is $584,966, it's crucial for landlords and small-portfolio investors to understand the implications of this gap. The median income in the area is $104,694, suggesting that while some residents might have the financial capacity to pay higher rents, others may rely heavily on housing vouchers.

When FMR is lower than the market rent, landlords face the challenge of accepting a reduced rental rate compared to what they could potentially earn from open-market tenants. This scenario makes the Section 8 program less favorable for maximizing immediate rental income but can still offer a stable tenant base and a predictable revenue stream due to the government's involvement in covering part of the rent.

To illustrate the cost of housing voucher tenants below open-market rates, consider the following points:

Opportunity Cost: By renting to Section 8 tenants at $2210, landlords miss out on the additional $125 that could be earned from market-rate tenants, representing a 5.65% reduction in potential rental income.
Maintenance and Upkeep: Given the lower rental income, landlords must ensure that the property remains attractive to maintain the Section 8 occupancy. This involves managing costs carefully and possibly adjusting expectations regarding property enhancements and upgrades.
Tenant Stability: Despite the lower rent, the Section 8 program provides a reliable source of tenants who are committed to paying their portion of the rent, thus reducing vacancy risks and associated costs.

While the immediate financial benefit may appear limited, the long-term stability and security offered by the Section 8 program can be an attractive option for landlords and investors looking to secure consistent cash flow in a competitive rental market.

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.