Section 8 Fair Market Rent (FMR) for ZIP 59102 - 2027

Investment Score for ZIP 59102

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	$1,030
1 Bedroom	$1,160
2 Bedrooms	$1,470
3 Bedrooms	$2,040
4 Bedrooms	$2,320
5 Bedrooms	$2,691
6 Bedrooms	$3,014
7 Bedrooms	$3,255
8 Bedrooms	$3,418

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	$1,160	$184,006	0.63%	D
2BR	$1,470	$284,487	0.52%	F
3BR	$2,040	$365,190	0.56%	F
4BR	$2,320	$408,829	0.57%	F
5BR	$2,691	$456,851	0.59%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

Market Analysis for ZIP Code 59102 (Billings, MT) The ZIP code 59102, located in Billings, Montana, is situated within Yellowstone County. With a population of 47,977, it has a significant rental market, with 31.5% of households being renters. The occupancy rate stands at 94.1%, indicating a robust demand for housing units. The median household income in the area is $76,141, which provides a baseline for understanding the economic conditions affecting the rental market. ### Section 8 Voucher Dynamics The Fair Market Rent (FMR) figures for 2026 in ZIP 59102 are as follows: - 0BR: $1060 - 1BR: $1160 - 2BR: $1480 (23.3% of median income) - 3BR: $2040 - 4BR: $2310 These FMRs represent the maximum rent that a Section 8 voucher holder can pay based on the size of their unit. However, comparing these figures to actual rents reveals a significant discrepancy. For instance, the Zillow median price for a 2BR property is $273,413. This high median price suggests that the cost of owning a 2BR home is substantially higher than the FMR, which is only $1480 per month. The price-to-FMR ratio for a 2BR unit is 15.4x, meaning that the monthly mortgage payment for a typical 2BR home would be much higher than what a Section 8 voucher can cover. This gap between FMR and actual rents creates several constraints for voucher holders: - They may struggle to find landlords willing to accept Section 8 vouchers due to the low rent ceiling. - Landlords might prefer cash-paying tenants who can afford higher rents, leading to limited options for voucher holders. - The high price-to-FMR ratio indicates that properties in this ZIP code are not affordable for those relying solely on Section 8 assistance. ### Affordability & Renter Profile Given the median household income of $76,141, the affordability of renting a 2BR unit at $1480 per month (23.3% of median income) is relatively manageable for many residents. However, the high median home price of $273,413 suggests that homeownership is less accessible, particularly for lower-income households. This dynamic likely contributes to the 31.5% of households being renters, as they may find renting more financially feasible than purchasing. The rental market in 59102 appears to be quite tight, given the occupancy rate of 94.1%. This high occupancy rate indicates that there is little vacancy, and demand for rental units is strong. Consequently, landlords have the upper hand in setting rents, which can lead to higher prices and fewer affordable options for low-income renters. ### Investor Angle From an investor perspective, the cash flow potential at FMR levels needs careful consideration. Given the high median home price and the price-to-FMR ratio, it is unlikely that an investor could purchase a property and generate positive cash flow solely by renting it at FMR rates. For example, a 2BR property priced at $273,413 would require a mortgage payment well above the $1480 FMR, making it difficult to achieve profitability without substantial equity or very favorable financing terms. In terms of investment grade, the high price-to-FMR ratio and the tight rental market suggest that investing in this ZIP code with a focus on Section 8 tenants would be challenging. The primary constraint is the inability to charge rents that reflect the true cost of ownership, including mortgage payments, maintenance, and other expenses. ### Specific Actionable Insights 1. **Target Higher-Rent Properties**: Investors should consider targeting properties that can command rents above the FMR threshold. For instance, focusing on 3BR or 4BR units where the FMR is $2040 and $2310 respectively, might offer better cash flow opportunities. These larger units often attract families who may be willing to pay more than the FMR. 2. **Diversify Tenant Base**: To mitigate the risk associated with Section 8 tenants, investors should diversify their tenant base. This means accepting a mix of cash-paying tenants and Section 8 voucher holders. By doing so, they can balance the lower rents from Section 8 tenants with higher rents from other sources, potentially achieving a more stable cash flow. 3. **Focus on Maintenance and Value Addition**: Given the tight rental market, properties that are well-maintained and offer additional amenities may command higher rents. Investing in upgrades such as energy-efficient appliances, modern kitchens, and bathrooms can make a property more attractive to tenants willing to pay above the FMR. ### Bottom Line For Section 8-focused investors, the recommendation for ZIP 59102 is to **Skip**. The high price-to-FMR ratio and the tight rental market make it difficult to achieve positive cash flow when renting exclusively to Section 8 tenants. Instead, investors should look for areas with a lower price-to-FMR ratio or consider diversifying their tenant mix to include non-Section 8 renters. If an investor still wishes to pursue this market, they should target larger units (3BR or 4BR) and focus on value addition through maintenance and upgrades to attract tenants willing to pay above the FMR. However, the overall environment in 59102 is not conducive to a purely Section 8-focused investment strategy.

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.