Basic Allowance for Housing (BAH) is provided by the U.S. Department of Defense to eliminate—or at least offset—housing costs for uniformed service members. Because the BAH typically applies in situations where quarters are not provided for service members at their base, it is largely based on local, off-base housing costs. The BAH also:
- Can be adjusted annually per changes in cost of living in a given area
- Uses cost of living variables to calculate rates in your area
- Includes an individual rate protection program to buffer service members from rate decreases
The original goal of the BAH was to make it possible for active service members required to live in civilian housing to have no out-of-pocket living expenses.
Historically speaking, BAH rates have remained steady, although they have seen some increases for inflation in different areas of the nation and different times. Drops in BAH rates do occur sometimes, especially in less populated areas where rental markets are often decreasing.
Understanding VA BAH Rates
The BAH was designed to make it possible for uniformed members of the Armed Forces to not have to pay for their housing, even when quarters are not available on base and they must use local housing off base. It’s based on the cost of housing around each base—the area, in your case. Since local housing costs tend to change from year to year, BAH rates also shift to follow the local housing market.
For example, between 2011 and 2012, the average BAH across the U.S. increased by 2 percent. This increase was likely due to changes in the local costs of utilities, rent, and renter’s insurance at various types of housing in each area. BAH rates are calculated based on all of these factors and more. A change in any one of these costs may cause BAH rates to rise or fall.
Speaking of falling rates, 9 years ago, Congress provided protection for active service members against such rate drops in the form of the individual rate protection program. This program stipulates that any service members who experience decreases in their local BAH are entitled to an increase in pay.
So what is your specific BAH? As stated earlier, there are many factors at play when it comes to figuring out your BAH. The best advice is to go to the source by visiting the appropriate government website.
If you are an active member of the Armed Forces who is already receiving BAH, you can expect to be automatically notified in the event that you become eligible for an increase. In the event of a decrease in your BAH, you should be covered by the individual rate protection program.
If you need help ordering your Certificate of Eligibility, we here at MortgageAdvisor.com are happy to assist you.