FY 2013 FMR areas continue to use the revised Office of Management and Budget (OMB) area definitions that were first issued in 2003 along with HUD defined Metropolitan areas (HMFAs) as described in the
FY2011 FMR documentation which can be found at (Great Falls, MT MSA FY2012 FMR Documentation system).
No changes have been made to these OMB-defined areas since the publication of Final FY2012 FMRs
The Great Falls, MT MSA is comprised of the following counties:
Cascade County, Montana.
All information here applies to the entirety of the Great Falls, MT MSA.
Fair Market Rent Calculation Methodology - Updated for FY2013
Fair Market Rents for metropolitan areas and non-metropolitan FMR areas are developed as follows:
2006-2010 5-year American Community Survey (ACS) estimates of 2-bedroom adjusted standard quality gross rents calculated for each FMR area are used as the new basis for FY2013.
In areas where the 2006-2010 5-year ACS 2-bedroom adjusted standard quality gross rent estimate is less than its respective margin of error, the state non-metro estimate of 2-bedroom adjusted standard quality gross rent is used.
HUD calculates a recent-mover adjustment factor by comparing a 2010 1-year 40th percentile recent-mover 2-bedrooom rent to the 2006-2010 5-year 40th percentile adjusted standard quality gross rent for the same geographic area in the following manner. A statistical comparison is made between the 2006-2010 5-year 2-bedroom adjusted standard quality gross rent and the 2010 1-year 2-bedroom recent-mover gross rent for smallest geographic area containing the FMR area for which both the 2006-2010 5-year ACS 2-bedroom adjusted standard quality gross rent estimate is less than its respective margin of error and the 2010 1-year ACS 2-bedroom adjusted standard quality gross rent estimate from recent movers is less than its respective margin of error. For metropolitan areas, the order of geographies examined is: FMR Area, Entire Metropolitan Area (for Metropolitan Sub-Areas), State Metropolitan Portion, Entire State, and Entire US; for non-metropolitan areas, the order of geographies examined is: FMR Area, State Non-Metropolitan Portion, Entire State, and Entire US.
HUD calculates the appropriate recent-mover adjustment factor between the 5-year data and the 1-year data and applies this to the 5-year base rent estimate.
Rents are calculated as of December 2011 using the relevant (regional or local) change in CPI from annual 2010 to annual 2011 as well as the change in national CPI from annual 2010 to December 2011.
All estimates are then trended from December 2011 to April 2013 (15 months) with a trending factor of 3.27 percent per year.
The FY2013 FMR is then calculated by multiplying the base rent, the recent-mover adjustment factor, the CPI adjustment, and the trend factor.
FY2013 FMRs are then compared to a state minimum rent, and any area whose preliminary FMR falls below this value is raised to the level of the state minimum.
The results of the Fair Market Rent Step-by-Step Process
Great Falls, MT MSA Results
The following are the 2010 American Community Survey 5-year 2-Bedroom Adjusted Standard Quality Gross Rent estimate and margin of error for Great Falls, MT MSA.
The following calculations are based on data for the entirety of the OMB-defined metropolitan area of Great Falls, MT MSA.
For additional information on area definitions please see the Great Falls, MT MSA FY2012 FMR Documentation system.
Area
ACS_{2010} 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent
ACS_{2010} 5-Year 2-Bedroom Adjusted Standard Quality Gross Rent Margin of Error
Use ACS_{2010} 5-Year Great Falls, MT MSA 2-Bedroom Adjusted Standard Quality Gross Rent
Since the ACS_{2010} Margin of Error Ratio is less than 1, the ACS_{2010}Great Falls, MT MSA value is used for the estimate of 2-Bedroom Adjusted Standard Quality Gross Rent:
Area
ACS_{2010} Rent
Great Falls, MT MSA
$559
A recent-mover adjustment factor is applied based on the smallest area of geography which contains Great Falls, MT MSA and has an ACS_{2010} 1-year Adjusted Standard Quality Recent-Mover estimate with a Margin of Error Ratio that is less than 1:
Area
ACS_{2010} 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent
ACS_{2010} 1-Year 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent Margin of Error
Use ACS_{2010} 1-Year Great Falls, MT MSA 2-Bedroom Adjusted Standard Quality Recent-Mover Gross Rent
The smallest area of geography which contains Great Falls, MT MSA and has an ACS_{2010} 1-year Adjusted Standard Quality Recent-Mover estimate with a Margin of Error Ratio that is less than 1 is Great Falls, MT MSA.
The calculation of the relevant Recent-Mover Adjustment Factor for Great Falls, MT MSA is as follows:
ACS_{2010} 5-Year Area
ACS_{2010} 5-Year 40th Percentile 2-Bedroom Adjusted Standard Quality Gross Rent
Use calculated Recent-Mover Adjustment Factor of 1.1038
The calculation of the relevant CPI Update Factors for Great Falls, MT MSA is as follows:
HUD updates the 2010 intermediate rent with the ratio of the annual 2011 local or regional CPI to the annual 2010 local or regional CPI to establish rents as of 2011.
HUD then updates this 2011 annual CPI with the ratio of the December 2011 national CPI to the annual 2010 national CPI to establish rents as of December 2011.
The calculation of the Trend Factor is as follows:
HUD applies an additional 15 months of trending to update rents to April, 2013, the mid-point of FY 2013. This trend factor is determined by taking the average annual growth rate in the national 1-Year Median Gross Rent between the 2005 and 2010 American Community Surveys.
ACS_{2005}U.S. 1-Year Median Gross Rent
ACS_{2010}U.S. 1-Year Median Gross Rent
Average Annual Change in U.S. 1-Year Median Gross Rent
Trend Factor 3.27% for 1.25 years
$728
$855
($855 / $728) ^ (1/5) = (1.1745) ^ (1/5) = 1.0327
1.0327 ^ (1.25) = 1.0410
The FY 2013 2-Bedroom Fair Market Rent for Great Falls, MT MSA is calculated as follows:
Area
ACS_{2010} 5-Year Estimate
Recent-Mover Adjustment Factor
Annual 2010 to December 2011 CPI Adjustment
Trending 3.27% for 1.25 years
FY 2013 2-Bedroom FMR
Great Falls, MT MSA
$559
1.1038
1.032
1.0410
$559 * 1.1038 * 1.0320 * 1.0410 = $663
In keeping with HUD policy, the preliminary FY 2013 FMR is checked to ensure that is does not fall below the state minimum for Montana:
Final FY 2013 Rents for All Bedroom Sizes for Great Falls, MT MSA
The following table shows the Final FY 2013 FMRs by bedroom sizes.
The FMRs for units
with different numbers of bedrooms are computed from the ratio of the
40^{th} percentile adjusted standard quality gross rent for the different unit sizes to the
40^{th} percentile adjusted standard quality 2-Bedroom gross rent from the 2006-2010 5-year ACS. These Rent Ratios are applied to the
Final FY 2013 2-Bedroom FMR
to determine the Final FY 2013 FMRs
for the different size units.
Click on the links in the table to see how the bedroom rents were derived.
The FMRs for unit sizes larger than four bedrooms are calculated by adding 15 percent to the four bedroom FMR, for each extra bedroom.
For example, the FMR for a five bedroom unit is 1.15 times the four bedroom FMR, and the FMR for a six bedroom unit is 1.30 times the four bedroom
FMR. FMRs for single-room occupancy units are 0.75 times the zero bedroom (efficiency) FMR.