In the movies, military life takes place on base, in tidy barracks with rows of well-made bunks. In reality, those barracks are only part of the story. The number and diversity of uniformed personnel require a variety of military housing solutions.
The Basic Allowance for Housing (BAH) is perhaps the most comprehensive and versatile of these solutions.
Because any military program must account for thousands of individuals in a wide range of locations, the rules and policies can become complex – enough so that a comprehensive explainer is bound to come in handy for military personnel facing decisions about off-site housing.
For starters, understand that your individual BAH is determined by a formula designed to provide fair, equitable and safe housing for personnel based anywhere in the United States.
Who is Eligible for the BAH Program?
If you are a service member assigned to permanent duty within the United States and you are not placed in furnished government housing, you are eligible for a Basic Allowance for Housing.
Flexibility and freedom of choice are major benefits of the BAH program. Your individual BAH is based on variables included in the program’s BAH formula. Those variables include the member’s pay grade, whether the member has dependents, the location of the member’s assignment and the costs for housing in that location.
In general, older members of higher rank and with more experience, receive a larger monthly allowance for off-base housing. There are exceptions.
For military members and their families based outside of the United States, the Overseas Housing Allowance is an equivalent program to the domestic BAH program.
How Are Basic Allowance for Housing Rates Calculated?
The BAH is designed to account for the different circumstances of individual military members, which means two members of the same age and experience could have different monthly allowances. Each individual BAH is based on rank or pay grade, the zip code of their permanent duty station, and whether they have dependents.
The allowance is based partly on the location of the member’s duty station, not the zip code of the residence, and whether the member has dependents, regardless of the number of dependents.
Individual rates are calculated annually by the Defense Department and are based upon current rental costs, including utilities and renters’ insurance, in specific areas. They do not consider the cost of mortgage payments.
Allowances are different in different parts of the country, allowing members in places with higher costs for housing to live equitably to those stationed in less expensive areas.
The allowances can also be different within the same housing area. It may, for example, cost more to live in the heart of a city than in the suburbs or countryside.
Can Individual Basic Allowances for Housing Decrease if the Rate Decreases?
BAH rates are based on constant monitoring of rental costs in more than 300 military housing areas, and that can lead to the allowance being lowered when rental costs fall.
That is where individual rate protection comes in. An individual’s personal allowance remains at the rate in effect when the individual arrived at their duty station.
There are, however, specific conditions that could cause your BAH to go down:
- If a member is assigned to a new duty station with lower housing costs, the member receives the BAH rate in effect at the new station.
- If a member is demoted, the member’s BAH changes to the current rate for the lower pay grade.
- If a member’s dependency status changes, whether adding a dependent or vice versa, the member’s BAH changes to the rate effective on the date of the change.
Put Your BAH to Use
Uniforms are important to the military, but the Basic Allowance for Housing is anything but uniform for many reasons. The variables can be understood using the BAH Calculator tool:
BAH rates are established by monitoring the costs of rent, utilities and insurance in 300 Military Housing Areas all around the country. The BAH for a member assigned to a city in California will logically be higher than the BAH for a member assigned to a rural area in Georgia.
For example, for 2022, the BAH for a service member stationed in San Francisco with an E-5 pay grade would be $2,412 per month with dependents and $1,944 without.
A service member at E-5 living near Fort Benning, Ga., would receive a BAH of $1,377 per month with dependents and $1,173 without them.
BAH has evolved since its inception, when it covered about 80% of members’ housing costs. In 2000, the Secretary of Defense committed to reducing that 20 percent gap incrementally until it was zero – full housing coverage – by 2005. In 2015, coverage was reduced by 1 percent per year until it reached 95 percent coverage, where it remains.
There are typically out-of-pocket costs for service members, and those costs are lower or higher based on the member’s personal choice of housing. Choosing a more costly residence than your area’s median price will result in higher out-of-pocket costs. And, choosing less expensive housing will minimize out-of-pocket costs.
In the face of so much change and uncertainty, the DoD BAH Calculator tool provides the most accurate current snapshot for each member’s situation. The Calculator tool requires only two pieces of information: pay grade and the zip code for the duty location in question.
About The Author
Phil Sheridan writes about military benefits for Military Money. Phil spent over 30 years learning about labor negotiations, salary caps, stadium negotiations and a lot of other finance-related matters as a reporter and columnist for the Philadelphia Inquirer and ESPN.
- Birk, C. (2020, September 17) Using Basic Allowance for Housing (BAH) on VA Loans. Retrieved from https://www.veteransunited.com/futurehomeowners/basic-allowance-for-housing-and-va-loans/
- N.A. (ND) 2022 BAH Rates By State and Local MHA. Retrieved from https://veteran.com/bah-rates-state
- Jowers, K. (2021, March 30) Many military families are paying more than $200 a month out of pocket for housing costs above BHA, survey finds. Retrieved from https://www.militarytimes.com/pay-benefits/mil-money/2021/03/30/many-military-families-are-paying-more-than-200-a-month-out-of-pocket-for-housing-costs-above-bah-survey-finds/