Location: Lincoln County, MT | Metro: Lincoln 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 | $970 |
| 1 Bedroom | $1,010 |
| 2 Bedrooms | $1,100 |
| 3 Bedrooms | $1,520 |
| 4 Bedrooms | $1,810 |
| 5 Bedrooms | $2,100 |
| 6 Bedrooms | $2,352 |
| 7 Bedrooms | $2,540 |
| 8 Bedrooms | $2,667 |
Zillow median home prices vs Section 8 FMR rates (Data: 2026-08-31)
| Bedrooms | Monthly FMR | Median Price | 1% Rule | Grade |
|---|---|---|---|---|
| 1BR | $1,010 | $273,003 | 0.37% | F |
| 2BR | $1,100 | $284,495 | 0.39% | F |
| 3BR | $1,520 | $385,650 | 0.39% | F |
| 4BR | $1,810 | $425,859 | 0.43% | F |
| 5BR | $2,100 | $496,412 | 0.42% | F |
U.S. Census Bureau data (2024)
The Section 8 cap rate analysis for ZIP code 59923 in Libby, MT, provides insight into the potential returns for landlords and small-portfolio investors. To start, let's annualize the 2BR Fair Market Rent (FMR) and market rent figures against the median home value.
Based on the 2BR FMR of $1,060 per month for fiscal year 2026, the annualized rent would be $12,720. Dividing this by the median home value of $345,948 yields an implied gross yield of approximately 3.67%. This calculation assumes that the property is rented at the FMR level throughout the year.
In contrast, using the market rent figure of $665 per month derived from the Census ACS, the annualized rent would be $7,980. When this amount is divided by the median home value, the implied gross yield drops significantly to about 2.31%. This scenario reflects the actual rental rates observed in the area.
Given the 28.0% renter density in Libby, MT, it is important to consider the likelihood of finding tenants willing to pay the FMR versus those who might be interested in the market rent. The FMR scenario, while providing a higher gross yield, may not be realistic for most landlords due to the limited number of tenants who can afford such rates. On the other hand, the market rent scenario, despite offering a lower gross yield, aligns more closely with the current rental environment and tenant affordability.
The N/A-day DOM (Days on Market) indicates that there is insufficient data to determine how quickly properties are rented out. However, considering the market conditions, it is reasonable to assume that properties rented at the market rate will have a better chance of being occupied consistently, thus generating steady income. While the FMR scenario presents a more attractive gross yield, the market rent scenario is likely more sustainable and practical for most landlords in this area.
To summarize, the gross yield under the FMR scenario is approximately 3.67%, whereas the market rent scenario implies a gross yield of around 2.31%. Given the local economic conditions and tenant demographics, the latter scenario appears to be the more realistic expectation for landlords and small-portfolio investors in ZIP code 59923.
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.