2018 BAH (Basic Allowance for Housing) Rates

The 2018 Basic Allowance for Housing (BAH) rate increase is currently proposed at 2.9.% according to the President’s defense budget. The 2.9% increase would be effective on January 1, 2018 and servicemembers would see their first increase in their January 15th, 2018 pay.

The BAH rate increase will not become official and may be adjusted until the FY2018 National Defense Authorization Act aka the defense budgets is signed into law. Typically Congress and the President agree on a final version, and the President signs it into law in December.

The BAH program also includes a plan to slow growth, which will eventually achieve a 5% out-of-pocket cost for living expenses. For 2018, the rate will cover 96 percent of service members’ housing costs, a one percent drop from last year. BAH used to cover 99% of housing expenses but by 2019, service members will be paying 5% of their housing expenses out of pocket.

Not all locations will see an increase, as BAH is based on the duty station zip code, or school zip code in the case of veterans using the Post-9/11 GI Bill, and thus corresponds with the cost of living of that zip code. For instance, cities with a very high cost of living such as Honolulu, Chicago, and Los Angeles have a very high BAH rate to help off-set those costs. Smaller cities such as Tacoma or Colorado Springs have a lower cost of living and therefore a lower BAH.


BAH Calculator
 

YEAR: DUTY ZIP CODE: PAY GRADE:

 

FY2012 – FY2018 Basic Allowance for Housing (BAH) Comparison

Year Proposed Increase/Decrease Actual Increase
2018 2.90% TBD
2017 2.90% 2.4%
2016 1.30% 3.4%
2015 -5.00% 0.5%
2014 4.20% 5.00%
2013 4.20% 3.80%
2012 4.20% 2.0%

BAH Changes Timeline

Late 1990s
Defense Department began increasing housing allowance rates to bring them in line with actual rental market housing costs across the country and to reduce members’ out-of-pocket housing costs. Prior to this initiative, a military member’s housing allowance covered only about 80 percent of their full housing costs, leaving an out-of-pocket cost of up to 20 percent.

By 2005
Housing allowance rates were increased enough so that the median out-of-pocket “off-base” housing cost was completely eliminated for members by pay grade, location, and dependency status. The Military Services also entered into numerous public-private ventures (PPVs) designed to eliminate inadequate government housing by leveraging private sector financing, expertise, and innovation to provide necessary housing faster and more efficiently than traditional Military Construction processes would allow.

FY 2015
Authorized the monthly Basic Allowance for Housing (BAH) rates to be set at 99 percent (vs. 100 percent) of the median rental housing costs.

FY 2016
Authorized monthly BAH rates to be set at 95 percent (vs. 99 percent) of the median rental housing costs; phased in 1.0 percent increments per year over 4 years.

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What First Time VA Borrowers Should Know

Are you thinking of using your VA home loan benefits for the first time? Here are the basic things you need to know about the VA home loan process.

Air Force photo by Staff Sgt. Teresa J. Cleveland

VA Loans Are Guaranteed By The Government

Your VA mortgage is guaranteed by the government, but offered and processed by participating lenders. Your current financial institution may be one of these participating lenders, but if not you won’t have to search long before finding one. The Department of Veterans Affairs does not offer loans, nor does it accept loan applications. Your chosen participating lender will be able to tell you how to get started with their application process.

VA Loans Are For Eligible Service Members, Veterans, and Surviving Spouses

VA home loans, unlike the GI Bill, are not a transferrable benefit. A military member becomes eligible for the VA loan benefit after serving a specific number of days-a requirement which varies depending on when you join the military. Military members who are married may apply for the VA loan benefit with their spouses regardless of whether or not the spouse has served in uniform. The children of veterans or currently serving military members are not eligible for the VA loan benefit.

Some qualifying surviving spouses of military members who have died on active duty or as a result of active service may be eligible for VA loan benefits, but these must be applied for via the Department of Veterans Affairs before you approach a lender. Surviving spouses should contact the VA directly at 1-800-827-1000 for more information on how to get started.

VA Loan Benefits Include Grants For Qualifying Disabled Veterans

This aspect of your VA loan benefits isn’t as well-publicized, but is a major help to those who qualify. According to the VA official site (www.VA.gov) the VA Specially Adapted Housing Grant program is available “to Servicemembers and Veterans with certain permanent and total service-connected disabilities to help purchase or construct an adapted home, or modify an existing home to accommodate a disability.”

To apply for this program, VA Form 26-4555 is required, which is available for download at www.eBenefits.va.gov. VA money for specially adapted housing is a bona fide grant with no expectation of repayment. Borrowers must have qualifying disabilities and use the grant money for VA-approved renovations, upgrades, or construction.

VA Loans Feature No Down Payment Options

VA home loans offer a no-money-down option. However, it is important to know that VA mortgage loans do require a credit check and employment verification. Some borrowers who have FICO scores or credit history that a lender may consider marginal could be required to make a down payment as a “compensating factor” in such cases. Potential VA borrowers should not come to the application process with fewer than 12 months of on-time payments on all financial obligations. Anything less seriously compromises your chances at loan approval.



About The AuthorJoe Wallace is a 13-year veteran of the United States Air Force and a former reporter for Air Force Television News


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2017 BAH (Basic Allowance for Housing) Rates

The 2017 Basic Allowance for Housing (BAH) rate has increased on average by 2.4% or approximately $41 per month, according to a Defense Department news release. The new BAH rates took effect on January 1, 2017 and service members will see their first increase on their January 15th pay.

See the proposed 2018 Basic Allowance for Housing rates here.

While the BAH rates will be increasing for many service members this year, the BAH program also includes a plan to slow growth, which will eventually achieve a 5% out-of-pocket cost for living expenses. For 2017, the rate will cover 97 percent of service members’ housing costs, a one percent drop from last year. BAH used to cover 99% of housing expenses but by 2019, service members will be paying 5% of their housing expenses out of pocket.

BAH Basic Allowance Housing Rates

Not all locations will see this increase, as BAH is based on the duty station zip code, or school zip code in the case of veterans using the Post-9/11 GI Bill, and thus corresponds with the cost of living of that zip code. For instance, cities with a very high cost of living such as New York City, Boston, and San Francisco have a very high BAH rate to help off-set those costs. Smaller cities such as Pensacola or Lejeune have a lower cost of living and therefore a lower BAH.


BAH Calculator
 

YEAR: DUTY ZIP CODE: PAY GRADE:

 

FY2012 – FY2017 Basic Allowance for Housing (BAH) Comparison

Year Proposed Increase/Decrease Actual Increase
2017 2.90% 2.4%
2016 1.30% 3.4%
2015 -5.00% 0.5%
2014 4.20% 5.00%
2013 4.20% 3.80%
2012 4.20% 2.0%
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2016 BAH (Basic Allowance for Housing) Rates

The 2016 BAH rates increased on average by 3.4% or approximately $54 per month. The new rates took effect on January 1, 2016. While the BAH rates will be increasing for many service members this year, the BAH program also includes a plan to slow growth, which will eventually achieve a 5% out-of-pocket cost for living expenses. By 2019, service members will be paying 5% of their housing expenses out of pocket.

2017 BAH (Basic Allowance for Housing) Rates

This is building on the 1% out-of-pocket adjustment authorized in the FY 2015 National Defense Authorization Act. The FY 2016 NDAA slowed the annual BAH increases by an additional 1% this year and will gradually decrease up to 4% over the next 2 to 3 years, until rates cover 95 percent of housing rental and utilities costs.

The Pentagon will maintain individual rate protection for service members so no one will see a reduction in their current BAH. Service members have individual rate protection against any decrease and only newly reporting members would receive their location’s BAH 2016 rate, or receive the new rate upon a PCS move to a new stateside location.

The BAH rate increase is an average increase across all locations. BAH rates vary by location and not everyone will see the same increase, if any at all. Actual increases will be based on a “by location” housing market analysis conducted for the Department of Defense and a food cost index prepared by the Department of Agriculture, both of which are measured much closer to the effective date to ensure they best capture the actual cost impact on the service member.

Veterans are exempt from the BAH reduction and thus Post-9/11 GI Bill recipients will not see monthly stipends reduced.

What Can You Do?
 Contact your congressional representatives and let them know that you oppose reducing Basic Allowance for Housing (BAH) to 95% of total living costs.

 

2012-2016 BAH (Basic Allowance for Housing) Comparison
Year Proposed Increase/Decrease Actual Increase
2016 1.30% * 3.4%
2015 – 5.00% * 0.5%
2014 4.20% 5.00%
2013 4.20% 3.80%
2012 4.20% 2.00%

 


BAH Calculator
 

YEAR: DUTY ZIP CODE: PAY GRADE:

 

2016 BAH Charts

2016 – With Dependents BAH Rates

2016 – Without Dependents BAH Rates



The BAH rate increases are for all branches of the military, Air Force, Army, Coast Guard, Marines, Navy, and Reserves forces where applicable.

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2016 Non-Locality BAH Rates

2016 Non-Locality BAH Rates are effective January 1, 2016 through December 31st, 2016.

Non-locality BAH is basic housing allowance for members under the following circumstances:

Photo by Lance Cpl. Erin Tansey
Photo by Lance Cpl. Erin Tansey
  • Reservists on active duty less than 30 days.
  • Service members in transit from select areas where no prior BAH rate exists
  • Service members who live in government housing and pay child support, also known as BAH-Diff or BAH Differential. Service members who pay child support and live on the local economy. Eligible to receive the “with dependent” BAH rate for their locality.
2016 Non-Locality BAH Rates
Pay Grade Partial BAH RC/T* Without Dependents BAH RC/T* With Dependents Differential *
O-10 $50.70 $1,616.70 $1,988.70 $333.60
O-9 $50.70 $1,616.70 $1,988.70 $333.60
O-8 $50.70 $1,616.70 $1,988.70 $333.60
O-7 $50.70 $1,616.70 $1,988.70 $333.60
O-6 $39.60 $1,482.30 $1,790.10 $283.50
O-5 $33.00 $1,427.40 $1,725.90 $274.20
O-4 $26.70 $1,322.40 $1,521.00 $182.40
O-3 $22.20 $1,060.50 $1,258.50 $182.10
O-2 $17.70 $840.30 $1,074.00 $214.80
O-1 $13.20 $721.20 $961.20 $232.20
O3E $22.20 $1,144.50 $1,353.00 $190.80
O2E $17.70 $973.50 $1,220.70 $228.30
O1E $13.20 $846.60 $1,128.30 $267.60
W-5 $25.20 $1,344.00 $1,469.10 $114.00
W-4 $25.20 $1,193.10 $1,346.70 $140.40
W-3 $20.70 $1,003.50 $1,234.50 $211.80
W-2 $15.90 $890.40 $1,134.00 $223.80
W-1 $13.80 $746.70 $981.90 $216.60
E-9 $18.60 $979.80 $1,292.10 $285.90
E-8 $15.30 $900.30 $1,191.90 $267.90
E-7 $12.00 $829.80 $1,106.10 $310.20
E-6 $9.90 $766.80 $1,021.80 $300.00
E-5 $8.70 $689.70 $919.50 $255.30
E-4 $8.10 $600.00 $799.20 $220.50
E-3 $7.80 $557.70 $743.10 $180.90
E-2 $7.20 $531.60 $708.30 $241.50
E-1 >4 $6.90 $531.60 $708.30 285.90
E-1 >4 $6.90 $531.60 $708.30 285.90

*BAH RC/Transit rates are adjusted by the average change in housing costs; BAH-DIFF rates increase by the increase in the basic pay raise.

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