BAH rates are based on the combination of local costs for rent and utilities for various housing types. Any fluctuation of one or more of those factors in a given location will affect BAH rates for that location. Find your BAH Rates. Any active duty service members who see a drop in BAH for their locality will have their BAH protected, thanks to "individual rate protection," which was adopted by Congress over a decade ago.
Individual rate protection prevents the decrease of a BAH rate as long as the status of a service member remains unchanged. That means if you don't transfer to another unit, your BAH won't decrease, it can only increase. Another congressionally mandated change eliminated renter's insurance from the BAH calculation. That means that troops are expected to pay out of pocket for such insurance.
Privatized base housing companies also no longer provide that protection as part of on-base rental agreements. Related : See your BAH rates. It turns out, there are many reasons this can happen. Here are the main reasons family end up deciding to geo-bach:.
It is important to note that being a geo-bachelor is different from receiving unaccompanied orders. Does rate protection apply with these changes? This ensures members who have made long-term commitments in the form of a lease or contract are not penalized if the area's housing costs decrease.
I looked up the current year BAH amount for my grade and zip code and it's less than I was getting last year. Am I going to lose money? BAH rate protection keeps an individual from having a reduction in BAH as long as the individual maintains uninterrupted eligibility see below for BAH. This means an individual is authorized the 1 January rate for the individual's grade and location or the housing allowance being paid on 31 December of the previous year, whichever is larger.
Can I ever lose rate protection? Three separate circumstances may lead to a change in your status that interrupts your eligibility for the allowance, and then, only if the published allowance for your grade and location is less than what you are getting now.
First, and most common, a decrease occurs when you PCS to a location at which the housing cost is less than at your current duty station. At the new duty station you get a lower housing allowance, but you should be no worse off, because the allowance is driven by the housing costs there.
Second, if you are demoted, your housing allowance reverts to the then-current published table of allowances for your lower grade. Promotions do not lower your housing allowance. Third, if your dependency status changes from with-dependent to without-dependent, or vice versa , your housing allowance is determined by your new dependency status and the then-current published table of allowances for your grade.
If, in a given year, I lose rate protection, am I protected from further decreases in the following year s? Does rate protection keep me from getting rate increases? If you are promoted, your BAH rate is the then-current published BAH for your new higher grade, with the following exception. If you get promoted, and are in a location where the current published BAH for your new grade is lower than the BAH amount you were receiving before, you continue to receive the higher BAH amount.
Will I see big changes in housing allowances on 1 January? Typically changes in housing allowances are modest. Allowances reflect the costs associated with household rental. Housing allowances typically change accordingly. I have some out-of-pocket expenses! The BAH for my grade doesn't begin to cover my mortgage payment!
BAH is based on rental data. A homeowner's monthly mortgage payment is not used in the computation because the monthly cash outlay of a homeowner is not a good indicator of the economic costs of home ownership. The variables needed to compute this include such difficult to measure factors as the expected appreciation in the value of the residence, the amount of down payment, the opportunity costs of interest from down payments, settlement costs, and the tax savings due to the interest and tax payments deduction.
Therefore, BAH reflects the current rental market conditions not the historical circumstances surrounding various mortgage loans. What is the source of BAH rental data?
Current, valid rental costs are crucial to accurate BAH rates. We use data from multiple sources to provide a "checks and balances" approach. This ensures reliability and accuracy. We obtain current residential vacancies from local newspapers and real estate rental listings. We also contact apartment and real estate management companies to identify units for rental pricing. We consult with real estate professionals in each MHA to confirm market rental prices and obtain additional data.
Read more about BAH rate cuts. BAH Rates are set on median housing prices for your duty location. Buying or renting housing outside of the median price range for your rank and dependent status will affect whether or not your BAH will cover your total expenses or leave you with a surplus. Choosing to live in a larger or smaller residence than the median will affect how far your BAH goes.
Additionally, choosing to live closer or further from your base may affect the rental prices. As with all real estate, it often comes down to location, location, location. Yes, you can buy a house with your BAH. Whether or not BAH will cover your mortgage depends. Just be aware that by design, BAH does not consider mortgage costs, it only considers the median cost of renting. Buying a home is a major decision and not one we can cover in this article.
Positive factors to consider include potential market gains. Basic Allowance for Housing rates vary by location. The higher the cost of living, the higher the BAH rates. Some locations with a high cost of living may also be eligible for an additional Cost of Living Adjustment on top of the BAH benefit.
To use the BAH Calculator, enter the year, your duty zip code, and pay grade. The calculator will return the BAH rate for your location for both the single and with dependents rates. You can also find more background information on current BAH rates on our site , including the amount of the most recent BAH rate increases or decreases, and other supporting information. On the other hand, you will be grandfathered into the old rates if BAH rates for your area decrease.
Individual rate protection prevents decreases in housing allowances as long as the status of a service member remains unchanged. Service members are entitled to the BAH rates published 1 January or the amount of housing allowance they received on 31 December, whichever is larger. Rate protection continues unless the status of a service member changes due to:. Individual rate protection is important because changing BAH rates are common.
For example, in the last few years, several important changes have happened that decreased BAH in multiple locations. Cutting BAH for dual military couples was proposed as legislation, but there was massive push back from multiple sources. The DoD is looking for ways to save money and will continue to look for places to make cuts. Doing so could also put many families in financial jeopardy if they have based their current housing arrangements based on their current BAH. As of publication, this proposal has been scrapped and will not happen.
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