Basic Allowance for Housing: Frequently Asked Question

By Carol Church

What is BAH?

The BAH program provides housing stipends to service members in areas where government housing is not available. The allowance will vary based on the service member’s geographic location, his or her pay grade, and whether or not he or she has dependents. Note that the BAH does not vary based on the actual number of dependents. The only relevant question is “dependents” or “no dependents.”

Typically, BAH is given to service members when military housing is not available. However, in some cases, a service member can choose whether or not live in military housing. If they choose not to, they will receive the BAH.

What affects BAH rates?

The service member’s pay grade, whether he or she has dependents, and where he or she is stationed.

How are BAH rates determined?

The military uses a thorough process to determine the appropriate rate for 300 different Military Housing Areas nationwide. They research typical rental costs for 6 different types of housing in an area, from a one-bedroom apartment to a 4-bedroom freestanding home.

Service members receive a certain level of BAH based on their pay grade and whether or not they have dependents. Special attention is paid to ensuring that the rates are those found in neighborhoods appropriate to the service member’s pay grade.

Can BAH money go towards a mortgage?

Photo by Herald Post CC BY-NC 2.0

Yes, service members can use BAH money towards a mortgage if they choose. However, they should keep in mind that BAH rates are determined by looking at average rental costs, not average house prices. Of course, it’s also important to keep in mind the many other costs of home ownership, and the logistical issues involved in buying a home.

What if a service member wants to live in housing that costs more or less than the BAH?

Some service members may wish to live in housing that is more or less expensive than the BAH reimbursement for their area. For instance, some members with multiple dependents may prefer a larger home, while single members may be content with a smaller and more economical rental. Some may be willing to pay more to be very close to base, while others may be fine with being farther away. This is perfectly fine, and in fact the military expects it to happen. Service members who pay more rent than their BAH allowance will need to make up the difference with their own money. Those who pay less rent than their BAH will be able to pocket the “extra” BAH. This can be an excellent way to save money for an emergency fund or other needs.

What happens when the BAH changes?

BAH is adjusted every year on January 1, but service members should not experience any hardship due to this. If the BAH for an area goes down, service members already in a rental or home will continue to receive BAH at the former, higher rate. If the BAH for an area goes up, service members will receive the larger payment. This is in place to make sure service members do not need to move as a result of rate changes.

Service members continue to be protected under these terms unless their pay grade decreases, they no longer have dependents, or they receive a PCS (Permanent Change of Station).

Is BAH supposed to cover 100% of housing costs?

No. Originally, BAH was intended to cover only 80% of anticipated average housing costs, with the service member covering the remaining 20%. Then, in 2005, the law changed such that 100% of anticipated costs were covered. In 2015, there was another change such that service members needed to begin to cover a small amount of the costs. From 2015 to 2019, BAH rates will decrease by 1% every year, until BAH reaches a “low” of 95% of housing costs.

What are the BAH rates for 2017?

2017 BAH Rates for Servicemembers with Dependents

2017 BAH Rates for Servicemembers without Dependents

You can also use the military’s BAH calculator to compare BAH rates from different years and at different pay grades.

Are there other special circumstances that affect BAH? Where can I go to learn more?

Divorce, child custody arrangements, and being a dual-career military family can affect BAH. To learn more, visit the DOD’s Basic Allowance for Housing page.

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