Troop Tuesday: How BAH Actually Factors Into What You Can Afford

Let's talk about BAH for a second, because a lot of military buyers don't realize how much it actually factors into what they can afford. Basic Allowance for Housing is tax-free, and lenders who understand VA loans will often "gross up" that income when calculating your qualifying income,  meaning it counts for more than the raw dollar amount on your LES. 


A simple way to estimate your housing budget: take your BAH and add about 28% of your base pay. That total is roughly your max comfortable monthly housing payment. For example, an E-6 with $3,500 base pay and $2,900 BAH ends up with a ballpark of $3,880 a month to work with. 


BAH rates reset every January 1 and vary by zip code and pay grade, so the number changes depending on where you're headed next. If you're not sure what that means for your actual buying power, a mil-estate agent and a VA-savvy lender can run the real numbers for you in one conversation. Find a Veteran or Military Spouse agent in your area that can help you www.mil-estate.com 

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