Basic Allowance for Housing, or BAH, is paid monthly to eligible service members when government housing isn't available. Lenders can count BAH as effective income and use it to help calculate how much a borrower can spend on housing each month.
The amount a veteran receives for BAH is based on rank, years of service, dependent status and location.
In general, service members with higher ranks and more years of service receive more money each month for BAH, though there are exceptions. Rates also tend to be higher in major metropolitan areas or regions with higher costs of living.
BAH rates are set annually. If you decide to spend less on housing than your eligible rate, you can use the difference for other expenses. However, if your housing costs exceed the predetermined BAH rate, you'll need to make up the difference yourself.