The Basics of Basic Allowance for Housing
Basic Allowance for Housing, or BAH, is a monthly military stipend given to active duty service members to alleviate the cost of housing while being stationed in the United States. Basic Allowance for Housing is determined by a service member’s rank, geography, and number of dependents, and although BAH rates change yearly, a service member currently receiving BAH will never decrease.
How is BAH determined?
An entry level (E01) service member with dependents may have a Basic Allowance for Housing that ranges from $800-$1500 a month, but can be as low as $700 and as high as $2,700. Officers and Warrant Officers monthly BAH are usually higher with a low ranking Warrant Officer with dependents (W01) receiving between $1,200-$1,800 a month on average.
Although there is a great difference of ranges between what a service member could receive for BAH, the government carefully researches each areaâ€™s median housing costs to ensure service member’s do not struggle. Government workers review data sources, research rental listings, and even question real estate agents to obtain fair BAH for service members. So if a service member is living in a higher in real estate market such as Los Angeles, they will receive a higher BAH than a service member stationed in Salina, Kansas where the costs of housing is lower.
After a service member’s location is determined, his or her rank and the number of their dependents is factored in to calculate the service member’s alloted Basic Allowance for Housing. Depending on the type of housing the service member chooses, BAH may or may not cover the entire cost of housing.
Is BAH for Rent Only?
A service member’s Basic Allowance for Housing can be used for a mortgage payment, and can even help that service member qualify for a VA Home Loan to make their BAH stipend go even further. Because a service member’s Basic Allowance for Housing can never decrease, it makes it an ideal number when a lender considers a monthly mortgage payment.
Service member’s who are going to be stationed at a location for a long duration of time should considered purchasing a home with a VA loan. A VA loan is another benefit designed to help military service members achieve their dreams of home ownership, and can do so with zero down payment, competitive mortgage rates, and limited closing costs.
With many housing opportunities near MacDill Air Force Base, it may be the time to buy instead of rent. Contact us at Lipply Real Estate for more information.