Basics of Military Housing

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 area’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.

Tax Credit in Tampa

Tax Day 2010 has come and gone.

Nationwide, taxpayers capitalized on the homebuyer tax credit. However, qualified service members still have more than a year to take advantage of the credit that can return up to $8,000 and $6,500 to first-time and repeat homebuyers, respectively.

The extension for most taxpayers gave them until April 30, 2010 to ink a binding sales contract, and three more months to close the deal. Members of the armed forces, intelligence community and Foreign Service who are on official extended duty have until April 30, 2011 to sign a deal and July 30, 2011 to close it.

Those who qualify for the extra year will likely find appeal in the MacDill Air Force Base. The base is in the heart of Tampa Bay and only minutes from Tampa. Therefore, military members who have a VA loan backed by the Department of Veterans Affairs can still make use of the homebuyer tax credit. Also, the VA Home Loan Guaranty program caps interest rates for active-duty military members. Those terms make MacDill an even more attractive place to settle down. View homes near MacDill here.

To use the tax credit, there are general conditions:
-The maximum purchase price of a home is $800,000.
-To be considered a first-time homebuyer, you or your spouse cannot have owned a home in the last three years.
-Individuals with an annual income of at least $125,000 and married couples with an annual income of at least $250,000 cannot qualify for the tax credit.
-Those who are not purchasing their first home can qualify for up to $6,500 in return. All other requirements are the same, but the buyer must have occupied the residence for five of the last eight years.

If after buying a home with the help of the tax credit and having to sell it within three years of the initial purchase, the returned money amount will not be recaptured.

Read more about VA Guidelines here.