Section 8 Fair Market Rent (FMR) for ZIP 59101 - 2027

Investment Score for ZIP 59101

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	$950
1 Bedroom	$1,070
2 Bedrooms	$1,360
3 Bedrooms	$1,880
4 Bedrooms	$2,150
5 Bedrooms	$2,494
6 Bedrooms	$2,793
7 Bedrooms	$3,016
8 Bedrooms	$3,167

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
1BR	$1,070	$200,090	0.53%	F
2BR	$1,360	$273,471	0.5%	F
3BR	$1,880	$346,905	0.54%	F
4BR	$2,150	$398,274	0.54%	F
5BR	$2,494	$517,234	0.48%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 59101 (Billings, MT) #### Section 8 Voucher Dynamics The Fair Market Rent (FMR) for ZIP code 59101 in Billings, Montana, is set by HUD for 2026. The FMRs are as follows: - 0BR: $970 - 1BR: $1060 - 2BR: $1350 - 3BR: $1860 - 4BR: $2110 These figures represent the maximum rent that a Section 8 voucher holder can pay for housing. However, it is important to note that the actual rents in the market may be higher. For instance, the Zillow median price for a 2BR unit in this ZIP code is $262,567, which translates to a monthly mortgage payment of approximately $1,350 based on a typical loan-to-value ratio and interest rate. This means that the actual rent for a 2BR unit could be around $1,350, which is exactly the FMR for a 2BR unit. Given the occupancy rate of 92.2%, there is likely a strong demand for rental units in this area. This high demand suggests that landlords might charge rents above the FMR, especially for units that are in better condition or have additional amenities. As a result, voucher holders may face significant constraints in finding affordable housing that fits within their budget. They would need to look for units that are priced at or below the FMR, which could be challenging given the current market conditions. #### Affordability & Renter Profile ZIP code 59101 has a population of 42,250, with 43.6% of residents being renters. The median household income is $58,598, and the FMR for a 2BR unit represents 27.6% of this median income. This indicates that the majority of renters in this area are likely to be low-income individuals who rely heavily on affordable housing options. The high occupancy rate of 92.2% suggests that the rental market is relatively tight, with limited availability of units. This tightness could lead to upward pressure on rents, making it even more difficult for low-income renters to find suitable housing. Additionally, the fact that the Zillow median price for a 2BR unit is significantly higher than the FMR ($262,567 vs. $1350) implies that the cost of ownership is much higher than the cost of renting. This disparity could make it challenging for voucher holders to find landlords willing to accept lower rents. #### Investor Angle From an investor perspective, the key question is whether properties can generate positive cash flow when rented at the FMR. Based on the Zillow median price for a 2BR unit, the monthly mortgage payment would be around $1,350. If we assume that the actual rent charged is also around $1,350, then the cash flow would be minimal or negative if we factor in other expenses such as property taxes, insurance, maintenance, and utilities. To determine the investment grade, we must consider the price-to-FMR ratio, which is 16.2x for a 2BR unit. This high ratio indicates that the cost of purchasing a property is substantially higher than the rent it can command under the FMR guidelines. Therefore, the investment grade for this ZIP code would be considered low, as the potential for positive cash flow is limited. #### Specific Actionable Insights 1. **Focus on Lower-Bedroom Units**: Given the high price-to-FMR ratio, investors should focus on acquiring 0BR and 1BR units. These units have FMRs of $970 and $1060 respectively, which are lower than the Zillow median price for a 2BR unit. By targeting these smaller units, investors can potentially achieve positive cash flow while still serving the needs of low-income tenants. 2. **Consider Multi-Family Properties**: Single-family homes may not provide the best opportunity due to the high purchase costs relative to FMR. Instead, multi-family properties, such as duplexes or small apartment buildings, might offer a better return on investment. These properties often have economies of scale that can reduce per-unit expenses and improve overall cash flow. 3. **Engage with Local Housing Authorities**: Investors should actively engage with local housing authorities to understand the demand for Section 8 vouchers and any potential subsidies or incentives available for landlords who accept vouchers. This can help offset some of the financial constraints associated with renting at the FMR. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 59101 is to **Skip** this market. The high price-to-FMR ratio and the tight rental market make it challenging to achieve positive cash flow. While there is a significant number of renters and a high occupancy rate, the cost of acquiring properties far outweighs the potential rental income under the FMR guidelines. Investors looking to enter this market should carefully evaluate their options and consider alternative strategies, such as focusing on lower-bedroom units or engaging with local housing authorities for additional support.

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.