Basic Housing Allowance

Service members currently on active duty might just live for FREE. In areas where no government housing is offered, the military offers basic housing allowance (also known as BAH) to cover living expenses in “civilian housing markets.” According to the Department of Defense, BAH rates are calculated using “local area rental market data and vary by geographic duty station, pay grade and dependency status. The cost of utilities and renters’ insurance is also considered.”

This housing allowance is a stipend that can be applied to the rent or mortgage, depending on the service member’s housing preferences. Service members who use their VA loan benefits to buy a home and their BAH to pay the mortgage experience the maximum benefits of veteran’s housing programs… and a lot of extra money in their pockets. The amount you receive depends on the geographic location you’ve been assigned, your pay grade and dependency status.

Using your BAH for your VA Loan

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Your basic housing allowance may help you out in more ways than one. In addition to covering basic living expenses, it also provides income stability and proof of income when it comes time to buy a house. Mortgage lenders look at your BAH and know that you’ll have the funds coming in to pay your house payment. This stability can lead to a quicker loan process and lower interest rates (which in the end, means lower mortgages and more spending money each month.)