Active military members nationwide are still tweaking budgets and otherwise dealing with adjustments to Basic Allowance for Housing rates that took effect at the beginning of the year.
Basic Allowance for Housing rates increased by 2 percent on average. Subject to change annually, these housing allowances vary depending on several factors, including geography, rank and family size. Service members considering a home purchase can use BAH to cover part or all of their monthly mortgage obligations.
BAH rates experienced a healthy increase in some markets. In Minot, N.D., home to Minot Air Force Base, the BAH rate increase will be about 40 percent there for a maximum of $2,040 each month. San Francisco still has the highest possible BAH at $3,147. Other notable increases include:
- Washington, D.C. up 9.9 percent
- North Carolina’s Fort Bragg and Pope Air Force Base up 9.6 percent
- North Carolina’s Morehead and Cherry Point Marine Corps Air Station up 9.5 percent
Dips in BAH
Even though other military housing areas will be subject to lower BAH rates in 2012, service members already living there won’t lose any allowance. Service members who move to areas where BAH rates after Dec. 31, 2011 will get the lower rate. Areas with sizeable cuts include:
- Fort Irwin and Beale Air Force Base in California, down 8.5 percent and 5.2 percent, respectively
- Sheppard Air Force Base in Texas dropping 7.5 percent
- Holloman Air Force Base in New Mexico dropping 5.7 percent
BAH toward mortgage
BAH can add up quickly depending on where you’re stationed and your unique circumstances. Homeownership certainly isn’t for every active military member, but those looking to purchase can capitalize on this allowance. The most ideal situation is when your BAH is above the median cost of living in your area.
You’re entitled to put the BAH toward your home payment, but if your BAH is higher than your mortgage payment it can go toward other necessities. The Department of Defense broke down 2012 BAH rates by area.
To learn more about the VA mortgage process and how you can use your BAH as income check out this helpful guide.
Photo courtesy of Heather Elias under a Creative Commons license on Flickr.