Section 8 Fair Market Rent (FMR) for ZIP 59718 - 2027

Investment Score for ZIP 59718

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	$1,660
1 Bedroom	$1,820
2 Bedrooms	$2,380
3 Bedrooms	$3,300
4 Bedrooms	$3,940
5 Bedrooms	$4,570
6 Bedrooms	$5,118
7 Bedrooms	$5,527
8 Bedrooms	$5,803

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
1BR	$1,820	$375,783	0.48%	F
2BR	$2,380	$423,121	0.56%	F
3BR	$3,300	$609,060	0.54%	F
4BR	$3,940	$863,570	0.46%	F
5BR	$4,570	$1,145,222	0.4%	F

Demographics & Housing Statistics

U.S. Census Bureau data (2024)

### Market Analysis for ZIP Code 59718 (Bozeman, MT) #### Section 8 Voucher Dynamics In ZIP code 59718, the Fair Market Rent (FMR) for a two-bedroom apartment is set at $2,420 per month for the year 2026. This amount represents 29.3% of the median household income in the area, which stands at $99,123. However, the actual rental market price for a two-bedroom unit is significantly higher, with the Zillow median price being $423,476. The price-to-FMR ratio is an astounding 14.6x, indicating that the actual rent is far above the FMR. This means that voucher holders face significant constraints in finding affordable housing. For instance, a voucher holder would need to find a landlord willing to accept a rent of $2,420 for a two-bedroom unit, which is only about 16.7% of the median market price. Given the high market prices, it is likely that many landlords will not be willing to accept the lower FMR rates, leading to a challenging situation for voucher recipients. #### Affordability & Renter Profile The ZIP code 59718 has a population of 44,585, with 44.5% of residents being renters. This indicates a substantial demand for rental properties in the area. The occupancy rate of 91.9% suggests that the rental market is quite tight, with very little vacancy available. Given the high median household income and the fact that the median market rent for a two-bedroom unit is over $423,476, it is clear that the typical renter in this area is likely to be a middle-class individual or family who can afford higher rents. However, the FMR is set much lower, making it difficult for low-income individuals to find suitable housing without assistance. The gap between FMR and market rent also implies that there is a significant portion of the population that may struggle to find affordable housing, particularly those relying on Section 8 vouchers. #### Investor Angle From an investor perspective, the ZIP code 59718 presents a mixed picture. While the occupancy rate is high, suggesting strong demand, the actual rental prices are well above the FMR. To determine if this ZIP is cash-flow positive at FMR, we need to consider the cost of acquisition and the potential rental income. Assuming an investor purchases a two-bedroom property at the median market price of $423,476 and aims to rent it out at the FMR of $2,420 per month, the annual rental income would be $29,040. If we assume a conservative mortgage rate of 5%, the monthly mortgage payment would be approximately $2,120, resulting in an annual mortgage payment of $25,440. After deducting the mortgage payment from the rental income, the net cash flow would be around $3,600 annually, or $300 per month. This is a relatively low margin considering the high purchase price and the costs associated with maintenance, taxes, and insurance. The investment grade for this ZIP code would be considered moderate to low due to the high acquisition costs relative to the FMR-based rental income. Investors should carefully evaluate their risk tolerance and expected returns before entering this market. #### Specific Actionable Insights 1. **Focus on Smaller Units**: Given the high price-to-FMR ratio, investors might want to focus on smaller units such as one-bedroom apartments. The FMR for a one-bedroom unit is $1,840, which is still a fraction of the market price but offers a better chance of attracting tenants. A one-bedroom unit purchased at a similar price-to-size ratio would have a lower acquisition cost, potentially improving cash flow. 2. **Consider Multi-Family Properties**: Investing in multi-family properties could provide a better return on investment. For example, a four-unit building with two-bedroom units could generate a total rental income of $9,680 per month ($116,160 annually), assuming all units are rented at FMR. If the total acquisition cost is $1,693,904 (four times the median market price), the annual mortgage payment would be around $101,760, leaving a net cash flow of $14,400 annually. This scenario provides a more substantial cash flow compared to single-unit investments. #### Bottom Line For Section 8-focused investors, the recommendation for ZIP code 59718 is to **Skip**. The high market prices and the low FMR-to-market price ratio make it challenging to achieve positive cash flow while maintaining affordability for voucher holders. Additionally, the tight rental market and high occupancy rate suggest that competition for tenants is fierce, and landlords may prefer market-rate tenants over those with vouchers. Investors should look for areas where the FMR is closer to the market rent, offering a better opportunity for positive cash flow and easier tenant acquisition.

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.