Location: Teton County, MT | Metro: Lewis and Clark County, MT HUD Metro FMR Area
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 | $880 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,270 |
| 3 Bedrooms | $1,760 |
| 4 Bedrooms | $1,840 |
| 5 Bedrooms | $2,134 |
| 6 Bedrooms | $2,390 |
| 7 Bedrooms | $2,581 |
| 8 Bedrooms | $2,710 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 2BR | $1,270 | $301,866 | 0.42% | F |
| 3BR | $1,760 | $441,397 | 0.4% | F |
U.S. Census Bureau data (2024)
Skeptical investors considering the ZIP code 59410 in Augusta, MT, often raise several key concerns regarding the viability of investing in Section 8 properties here. Addressing these concerns with the available data can provide clarity on whether this area presents a sound investment opportunity.
Objection 1: Will the Fair Market Rent (FMR) of $1,270 for the metro area in fiscal year 2026 cover the mortgage on a $314,572 home?
The FMR figure of $1,270 suggests that rental income at this level could be sufficient to cover mortgage payments, especially if we consider typical mortgage rates and terms. Assuming a 30-year fixed-rate mortgage with an interest rate of 4%, the monthly payment on a $314,572 home would be approximately $1,500. While the FMR does not fully cover this amount, it's important to note that property values and mortgage rates can vary significantly. Additionally, landlords can apply for the Small Rent Increase Demonstration (SRID) program which allows for higher rents, potentially bringing the monthly payment closer to being covered by the FMR.
Objection 2: Is there enough renter demand at 33.7%?
The 33.7% renter occupancy rate might seem low compared to some metropolitan areas, but it indicates a steady demand for rentals. This percentage reflects a significant portion of the population that could be potential tenants. Moreover, the demand for affordable housing is often consistent, even in smaller towns like Augusta. The data does not specify the exact number of renters or the vacancy rate, which would provide a clearer picture of the competition and demand dynamics. However, the presence of Section 8 provides a reliable tenant pool, mitigating some risk associated with finding and retaining tenants.
Objection 3: Will vouchers keep pace with market rents of $828?
The voucher amount is designed to reflect local market conditions and should theoretically keep pace with the average market rent of $828. However, the data does not provide specific details on how the voucher amounts have changed over time or if they are projected to increase in line with market rents. It's crucial to monitor the HUD updates and local housing authority policies to ensure that the voucher amounts remain competitive. In many cases, the voucher system adjusts annually based on the FMR, so staying informed about these changes is essential.
In summary, while the data raises questions about the ability of FMR to fully cover mortgage costs and the adequacy of renter demand, the reliability of Section 8 vouchers and the potential for higher SRID rents offer compensating factors. Investors should also consider other aspects such as property maintenance costs and local economic trends before making a decision.
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.