Can a single soldier get BAH to pay mortgage?

SPC Private RallyPoint Member — Sun, 24 Jan 2021 03:51:47 -0500

My brother is thinking of joining the military but he is concerned about his mortgage because his mortgage is higher than his basic pay. In fact he would need to close be at least E5 to break even with his mortgage. I told him he can get BAH to pay his home but I am not sure if thats true. Can he receive BAH to pay his mortgage monthly?

Response by SGT Private RallyPoint Member made Jan 24 at 2021 4:17 AM

SGT Private RallyPoint Member — Sun, 24 Jan 2021 04:17:36 -0500

If he’s not married then he’s not entitled to BAH. SSG and above are entitled to BAH and can live in quarters other than the barracks. Only way to receive BAH is to be married or at least a SSG if not married.

Response by SFC Private RallyPoint Member made Jan 24 at 2021 8:09 AM

SFC Private RallyPoint Member — Sun, 24 Jan 2021 08:09:26 -0500

If he wants to join, why not just sell his house?

Response by LTC Kevin B. made Jan 24 at 2021 9:20 AM

LTC Kevin B. — Sun, 24 Jan 2021 09:20:50 -0500

He gets BAH if he either a) has dependents or b) is allowed by his command to live off-post and draw BAH. Otherwise, he won't get it just because he has a mortgage to pay. That's not how the military pay system works.

Response by SFC Casey O'Mally made Jan 24 at 2021 10:13 AM

SFC Casey O'Mally — Sun, 24 Jan 2021 10:13:24 -0500

*IF* and it is a big if, because it is highly unlikely, he gets BAH, he will not be authorized to live in the barracks. Which means he will need to find an apartment, and pay both mortgage and rent out of that BAH. And BAH will be based on duty location, so if he goes somewhere with lost cost of living (like Fort Polk or Fort Drum), BAH probably still won't cover mortgage, let alone mortgage plus rent.

His best bet is to sell (I understand family lives there so this is not ideal), rent (family can pay him to keep living there) or simply have remaining family take over mortgage payments until they move out or he finishes his time in service.

If the family is financially dependent on him, he may be able to claim them as dependents, and that COMPLETELY changes the entire conversation.

Response by Lt Col Jim Coe made Jan 24 at 2021 1:21 PM

Lt Col Jim Coe — Sun, 24 Jan 2021 13:21:34 -0500

LTC Kevin B. is right on. Compare the BAH rate at locations where your brother might be stationed to his mortgage plus taxes and insurance on the residence. Your brother may have to look at alternatives to owning a residence with such a high mortgage payment:
-Refinance the loan. Interest rates are very low right now. Might get the mortgage payment down.
-Decrease or eliminate PMI. PMI insures the lender against bowers who don't put enough down payment on a house. Usually 20% down is needed to get a conventional loan without PMI. Sometimes a refinance can get rid of PMI if there's enough equity in the home.
-Hold out long enough to refinance under VA. Service members become eligible for VA home loans after a period of service (look it up on the VA website). VA loans do not require a down payment and don't have PMI. This could allow a lower monthly payment.
-Rent the property. If the rental rates in the region are high enough to cover the mortgage and other costs of renting the property, then this might be a good choice. Plus if Brother can sustain a loss on the rental property on paper it could become a tax deduction. There is a lot of ass pain in being a landlord. I recommend talking to somebody who is a landlord in Brother's region for more insights.
-Sell the property. In many areas this might be a good choice. If Brother can break even or make a little money on the sale this might be the best idea. Not owning a house early in one's enlisted career with frequent moves and possible overseas moves or deployments can be a good idea.

Response by SSG Brian G. made Jan 24 at 2021 10:19 PM

SSG Brian G. — Sun, 24 Jan 2021 22:19:03 -0500

That is going to depend on his command and location. If he is single with no dependents then he is unlikely to get it. Even more so if he is stationed in an area with ample barracks space.

Just because he has a home with mortgage is not a reason for him to be allowed BAH. Even at that? If he did get it he would have to find a place off post to live, as he will likely not be stationed where his actual home is. Cannot have it both ways.

Response by SFC Private RallyPoint Member made Jan 26 at 2021 12:08 PM

SFC Private RallyPoint Member — Tue, 26 Jan 2021 12:08:41 -0500

So many factors, training length is a factor, duty station, pay grade, etc. have him do his research before doing anything.

Response by SPC Private RallyPoint Member made Mar 5 at 2021 3:28 PM

SPC Private RallyPoint Member — Fri, 05 Mar 2021 15:28:08 -0500

He has to get a CNA which is an exception to policy for BAH. He has to have proof that he owns the house and pays the mortgage and has to have his 1SG, CDR, BN CDR and Brigade commander sign memos stating why it’s needed and a bunch of other documents including a 4187, 5960 and barracks and housing memos. I’ve completed one myself and it takes a long time. In my honest opinion He’s better off renting it out.

Response by COL Victor Hagan made Mar 10 at 2021 1:11 PM

COL Victor Hagan — Wed, 10 Mar 2021 13:11:58 -0500

No. Your brother will not receive BAH just because he has a mortgage. I would recommend he sell the house and place the proceeds in an index fund until he can move out of the barracks on his own without a commander's approval.

Response by LTC Private RallyPoint Member made Mar 10 at 2021 2:54 PM

LTC Private RallyPoint Member — Wed, 10 Mar 2021 14:54:52 -0500

I would recommend he not join the military until he has a better understanding of how it will effect his life.

Response by SFC Private RallyPoint Member made Jul 5 at 2021 8:31 AM

SFC Private RallyPoint Member — Mon, 05 Jul 2021 08:31:39 -0400

If he joins the Army Reserve, he I'd entitled to BAH while in training as a single Soldier. He will have to show proof of mortgage when in reception prior to basic training. If he goes Regular Army he will not be entitled to BAH.