How BAH Works for Military Home Buyers
Basic Allowance for Housing is one of the most powerful financial tools available to active-duty service members. Understanding how it works — especially combined with a VA loan — can put you on the path to homeownership faster than you think.
BAH as Qualifying Income
Because BAH is tax-free, VA-approved lenders can "gross up" the amount by 25% when calculating your debt-to-income ratio. If your BAH is $2,500/month, it could count as $3,125/month for qualification purposes. Combined with the VA loan's $0 down payment and no monthly mortgage insurance, your BAH alone may cover your entire mortgage in many markets across the country.
2026 BAH Rate Changes
The Department of Defense released 2026 BAH rates on December 11, 2025, with an average increase of 4.2% nationally. Rates are based on rental data from 299 Military Housing Areas and include a 5% member cost-sharing element. Some areas saw increases above 10%, while a small number of MHAs saw decreases. Rate protection ensures your BAH won't go down if you stay at the same duty station.
Using This Calculator
Enter your ZIP code, or type a base name like "MacDill AFB," "Fort Liberty," or "Camp Pendleton" to find your duty station instantly. Select your pay grade to see both with-dependents and without-dependents rates. The calculator covers all 299 Military Housing Areas across the entire United States, including Alaska and Hawaii. GI Bill students can look up their Monthly Housing Allowance (MHA) by entering their school's ZIP code and selecting E-5 with dependents.
Frequently Asked Questions
What is BAH?
BAH (Basic Allowance for Housing) is a monthly, tax-free allowance paid to active-duty service members to cover housing costs when government quarters aren't provided. It's based on your duty station ZIP code, pay grade, and dependency status. In 2026, the average national increase was 4.2%.
Can I use BAH to qualify for a VA loan?
Yes. BAH counts as qualifying income, and since it's tax-free, lenders can gross it up by 25%. Combined with the VA loan's $0 down payment and no monthly mortgage insurance, your BAH can often cover your full mortgage payment. Contact a VA loan specialist to see how much home you can afford.
How are BAH rates determined?
The DoD collects rental data annually from 299 Military Housing Areas. Rates are based on median market rents plus average utilities (electricity, heat, water/sewer) for apartments, townhomes, and single-family homes. A 5% member cost-sharing element is built in. New rates take effect January 1.
What is rate protection?
Rate protection means your BAH won't decrease as long as you stay at the same duty station with the same pay grade and dependency status. If local rates increase, you get the higher rate. If they decrease, you keep your existing rate. Protection resets when you PCS to a new location.
How does BAH work with the GI Bill?
Veterans using the Post-9/11 GI Bill receive a Monthly Housing Allowance (MHA) equal to the E-5 with dependents BAH rate for their school's ZIP code. MHA rates update August 1 each year. To estimate your MHA, enter your school's ZIP and select E-5 in this calculator. Online-only students receive a reduced national rate.
Does BAH cover my entire mortgage?
It depends on location, pay grade, and home price. In many markets, BAH can cover or nearly cover your entire VA loan payment — especially for E-5 and above with dependents. A VA loan requires $0 down and has no monthly mortgage insurance, keeping payments manageable. Schedule a free consultation to run the numbers for your situation.
