Last Updated on February 10, 2021 by Maggie Looker
The United States provides a Basic Allowance for Housing, or BAH, for all military members when governmental quarters are not available. The BAH helps ensure that military members have equitable housing compensation. The BAH you receive depends on the housing rates near your base, your dependency status, utilities, renters’ insurance, and your pay grade. If those variables change at all in your area, there will likely be a corresponding change in your BAH rate. Here are some frequently asked questions about BAH, a link to a BAH calculator, as well as some tips on how you can save money when buying a home in 2021.
How Long Has BAH Been Around?
BAH began in January of 1998, replacing the Variable Housing Allowance (VHA) and the Basic Allowance for Quarters (BAQ). Under the old allowance programs, service members were asked to self-report their housing costs in a survey each year. These survey results weren’t representative of the average housing costs, however, because some service members chose to live in housing that was substandard. The survey results showed them paying less for housing, which then lowered the BAH rate. The new BAH system instead looks at all the housing rates in the areas around military bases.
What is the BAH Rate for 2021?
Starting January 1, 2021, BAH rates increased by an average of 2.9%. It’s also important to remember that BAH rates are different depending on where you live, and not every area will see an increase this year. To get an idea of the BAH rate you can expect, consider using a BAH calculator.
How is the BAH Rate Calculated?
The BAH rate is calculated each year with data collected from approximately 300 military housing areas in the United States, including Hawaii and Alaska, according to the Department of Defense, who calculates BAH. The median current market rent and average utilities (including electricity, heat, and water/sewer) comprise the total housing cost for each military housing area, and are included in the BAH computation. Basic Allowance for Housing rates are then calculated for each pay grade, both with and without dependents.
What is a BAH Calculator?
A BAH calculator is used to determine your BAH rate. Just enter the year, your pay grade, and your station’s zip code. You’ll in turn get your estimated monthly BAH rate. If you have dependents, your BAH will be higher because you’ll need a bigger place to stay if your children live with you.
Does My Rate Change if I Have More Than One Child?
You will receive a higher Basic Allowance for Housing if you have dependents living with you, but your rate does not increase with each additional dependent. That is because the BAH rates depend on housing rates using comparable civilians and average family sizes.
How Much of My Housing Costs Are Covered?
Service members living in rental properties that are below the median price range will have zero out-of-pocket expenses. You might even take home some extra money each paycheck. If you choose to rent a median-priced property, you will likely have to spend a small amount over the BAH rate.
What if the BAH Rate Changes in My Area?
Thankfully, the Basic Allowance for Housing you receive is protected against rate decreases. That’s because of “individual rate protection,” which was passed by Congress over 10 years ago. If your status stays the same but the BAH rates in your area go down, your BAH remains the same. If the BAH increases in your area, you’ll see a corresponding increase in your BAH.
What If I Move to an Area with Lower BAH Rates Than I Had Before?
Your BAH rate won’t ever decrease if you stay in the same location. However, if you move to an area with lower BAH rates, your Basic Allowance will also decrease to that level. Fortunately, your housing will cost less so you won’t be losing out on any funds.
Does My Spouse’s Income Change My BAH?
No. The Regular Military Compensation (RMC) is what affects your BAH rate and does not take your spouse’s income into account.
When Are BAH Rates Released?
The Department of Defense typically releases annual BAH rates between December 15 and January 1 of the following year.
What If I Live in a Different Zip Code Other Than Where I Am Stationed?
BAH rates depend on where you report to duty, not the location of your residence. That’s because the military wanted to dissuade service members from choosing their housing based on BAH. Without this policy, military members might pick a place further away from base just to receive a higher BAH. You could also choose a lower BAH area but end up with higher commuting costs. You can still choose where you want to rent or buy, as long as you understand that BAH rates depend on your station location. Check out the BAH calculator to estimate your amount.
What if I Am Stationed Overseas?
If you are assigned overseas, the Overseas Housing Allowance (OHA) helps you privately lease housing if on-base or government housing is unavailable. You cannot use the BAH calculator to see this amount. This allowance helps over 55,000 military members living overseas every year. The OHA rates change according to the country you live in and are routinely updated based on cost data and fluctuations in currency.
Why Isn’t My BAH Covering My Mortgage Payment?
BAH rates change depending on the area’s rental rates, not housing prices. So, if you choose to purchase a house near your base, you will still see BAH on your monthly paycheck, but you’ll likely have some out-of-pocket expenses. See how much house you can afford between your BAH and your military pay.
If you’re a military service member looking to buy a home and want to save money, register with Homes for Heroes today. There’s no obligation, and you’ll be automatically matched with a real estate or mortgage specialist in your area. They’ll be your dedicated partner throughout the home buying process and can save you money on things like commissions, title fees, mortgage fees and inspection costs. Heroes like you save an average of $2,400 when buying and/or selling a home with the help of our specialists.
If you’re looking to buy a house near your base, register with Homes for Heroes to start saving money. Use the BAH calculator to estimate your allowance. When you’re ready to buy a home and/or sell your house because of reassignment, our specialists can save you an average of $2,400!