Military
What is BAH and can I use it to buy a home?
BAH (Basic Allowance for Housing) is a monthly housing benefit paid to eligible service members. It can be counted as income on a mortgage application, and for many military buyers it covers a significant portion of their monthly payment.
Basic Allowance for Housing (BAH) is a monthly benefit paid to active-duty service members who live off-post. The amount depends on your pay grade, dependency status, and duty station ZIP code. For buyers, it's one of the most important financial inputs to understand before shopping.
Does BAH count as income for a mortgage?
Yes. For VA loans and most conventional lenders working with military borrowers, BAH is counted as qualifying income when calculating your debt-to-income ratio. Because BAH is also non-taxable, lenders often gross it up by 25% to reflect its actual purchasing power — meaning $2,000/month in BAH may count as $2,500 toward your qualifying income.
What BAH covers in Central Texas
Fort Hood BAH rates are set for the Killeen-Fort Hood-Temple-Belton metro area. Depending on your rank and dependency status, BAH in this area can cover a substantial portion of a mortgage payment — especially when combined with a VA loan's no-down-payment benefit. For many E-5 through E-7 service members with dependents, BAH at current rates covers the majority of a principal and interest payment on a reasonably priced home in the area.
How to use BAH strategically
- Use the VA loan to eliminate the down payment requirement
- Count BAH (and its gross-up) toward qualifying income
- Price your target home so PITI stays within or close to your BAH rate
- Consider a PCS move as a potential rental opportunity — the home becomes an asset
Use the BAH Affordability calculator to see how your specific rate translates to purchase power in the Killeen and Fort Hood market.
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