October 27, 2021

U.S. Veterans

U.S.A Veterans News, Support & Information

Not All BAH is Created Equal

3 min read

Veterans Tip of the Week – Not All BAH is Created Equal

Question: Why is the BAH associated with my Post 9/11 GI Bill not considered allowable income for qualification on my VA Home Loan, but BAH on active duty is allowed?

Two reasons: First, use of educational benefits of any kind for income qualification on a VA loan is expressly prohibited in the VA lenders handbook (https://www.benefits.va.gov/warms/pam26_7.asp). Under the “Other Income” section 2.r. of Chapter 4: Do not include temporary income items such as VA educational allowances and unemployment compensation in effective income.

Second, in order to be considered allowable income, it needs to be stable and reliable. The Post 9/11 GI Bill, a great benefit you should use if eligible (https://www.benefits.gov/benefit/4731), is a defined 36 month benefit. The BAH paid as part of that program is tied directly to enrollment in classes. rate of pursuit of your degree and when classes are in session. For example, even though you may be a full time, in residence student, unless you are enrolled in a full time credit load over winter break and summer break, i.e., between semesters, you will not receive BAH for those days not enrolled. BAH is paid from the published start and stop dates of the school semester.

Note: Post 9/11 GI Bill BAH is not tracked to your housing expenses. You can use that money for whatever purpose you choose. It is just not considered allowable income for a loan. Use it to pay down debt or save toward that future home purchase.

Active Duty BAH or Basic Allowance for Housing, on the other hand, is supplemental income paid to active duty members who are living on the economy in off-base, privately purchased or rented property. It is considered stable and reliable because it it part of your overall compensation.

As always, please feel free to PM me if you have questions regarding your VA Benefits. If I don’t know the answer, we will find it together. #gogetrated

This, and all of my videos are hung on my veterans support YouTube Channel: Veterans Advice Hub (https://www.youtube.com/c/veteransadv… Please Like and Subscribe – 40+ Videos posted and more to come!

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