Location: Valley County, MT | Metro: Valley County, MT
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 | $1,040 |
| 1 Bedroom | $1,160 |
| 2 Bedrooms | $1,360 |
| 3 Bedrooms | $1,880 |
| 4 Bedrooms | $2,090 |
| 5 Bedrooms | $2,424 |
| 6 Bedrooms | $2,715 |
| 7 Bedrooms | $2,932 |
| 8 Bedrooms | $3,079 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,360 | $237,887 | 0.57% | F |
| 3BR | $1,880 | $311,771 | 0.6% | D |
U.S. Census Bureau data (2024)
A skeptical investor looking into ZIP code 59248, located in Frazer, MT, might have several concerns regarding the feasibility of investing in properties there, particularly under the Section 8 program. Let's address these concerns with the available data.
Objection 1: Will Fair Market Rent (FMR) of $1,440 (metro FY 2026) cover the mortgage on a $243,518 home?
The Fair Market Rent (FMR) set by HUD for ZIP 59248 is $1,440 per month for fiscal year 2026. To determine if this will cover the mortgage on a $243,518 home, we need to consider typical interest rates and loan terms. Assuming a 30-year fixed-rate mortgage at an average rate of 5%, the monthly mortgage payment would be approximately $1,275. This means that the FMR does indeed cover the mortgage payment, leaving a buffer of $165 per month. However, this calculation does not include property taxes, insurance, and maintenance costs, which can significantly impact profitability.
Objection 2: Is there enough renter demand at 9.1%?
The rental vacancy rate in ZIP 59248 is 9.1%. This percentage suggests that there is a moderate level of demand for rental properties. A vacancy rate below 10% generally indicates a stable market with reasonable demand. However, it is important to note that this figure alone does not provide a complete picture of the rental market dynamics. Factors such as population growth, employment opportunities, and seasonal trends also play a role in sustaining renter demand.
Objection 3: Will vouchers keep pace with $900 market rents?
The market rent for ZIP 59248 is reported to be around $900 per month. The FMR of $1,440 is higher than this market rent, indicating that voucher holders could potentially cover the cost of renting a unit at the market rate. However, the question of whether vouchers will keep pace with increasing market rents is more complex. While HUD adjusts FMRs annually based on housing market conditions, local market fluctuations can still affect the gap between voucher amounts and actual rents. In ZIP 59248, the current data shows that vouchers do cover the market rent, but future adjustments depend on the economic conditions and HUD's evaluation.
In conclusion, while the data suggests that the FMR can cover the mortgage and that there is a reasonable level of demand, the long-term sustainability of the investment hinges on how well voucher amounts will adjust to any future increases in market rents. Investors should monitor local economic indicators and HUD's annual FMR updates closely to ensure continued alignment with their investment goals.
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.