Understanding Basic Allowance for Housing (BAH)

Those serving our country give so much of themselves to keep America safe and secure. They deserve a place of refuge to come back to at the end of the day. In some cases, that housing is provided by the government. When it's not, service members receive a Basic Allowance for Housing (BAH) to use on the open market.

Combined with VA loans, which typically offer a 0% down payment option, BAH can make homeownership attainable for military members.¹

BAH at a glance: Definition and purpose

BAH is a benefit for active-duty service members stationed in the 50 U.S. states who are being provided government housing. It's intended to offset the cost of local housing in your area. The money received is nontaxable.

The amount servicemembers receive for BAH is based on factors including their pay grade, local rent in the area of the duty station, and whether they have dependents. Although it's based on rent, the money can also be used for buying a home, with or without a mortgage.

The BAH is managed by the Defense Travel Management Office (DTMO) in accordance with Department of Defense (DOD) policies. While serving similar purposes, BAH is different from the Overseas Housing Allowance (OHA) and Monthly Housing Allowance (MHA) under the GI Bill.

Eligibility and entitlement: When BAH starts, stops, or changes

BAH comes into play when you’re not assigned, or otherwise released from, government-provided quarters at or near your duty station. It stops when you're taken off active duty or are given government-provided housing.

The rate you're paid for BAH is updated annually on January 1 and is typically set in mid-December. If housing costs decrease in the area, you're grandfathered in at the prior rate because there’s rate protection for as long as you remain at your current duty station. Otherwise, your rates increase if costs increase.

Finally, you get higher rates for BAH if you have dependents, so it can change when you have dependents and decrease again when you no longer claim these dependents. This is tracked in the Defense Enrollment Eligibility Reporting System (DEERS).

The 3 core factors

There are a few key factors that determine your BAH rate:

• Pay grade: This is based on your rank and years of service.
• Rent costs: This varies with the area of your assignment.
• Dependents: This is strictly about whether you have dependents you're responsible for. It doesn't contemplate the number.

How housing cost data is collected

The base BAH rate is based on the following equation:

Area rental market rates + Average utility cost + Home type and bedroom count

The DOD maintains a public list of housing costs for 299 military housing areas in the U.S. This includes rent, as well as utility costs for heat, electricity, water, and sewer. The averages for each of these costs are taken and then multiplied by 0.95. The service member is expected to cover 5% under a cost-sharing arrangement.

Annual updates and individual rate protection

Updates to the rates are made annually and take effect on January 1. Cost increases are factored in your new BAH. As mentioned earlier, you don't have to worry about your BAH going down for as long as you're assigned to your duty station. Rate protection prevents this.

The only other way you receive a reduction in your rate is a pay grade reduction or a change in dependency status for your family.

Non-locality BAH and special situations

Non-locality BAH is used in situations when members of the force may be on active duty for short periods of time (such as reservists). Rather than being based on local rent, this number is based on national average housing costs. This also may apply if a service member is in transit from a prior duty station where BAH doesn't exist.

If you're married to another service member with whom you have children, only one of you collects BAH with dependents. The other collects BAH as if they were single and without dependents.

If you live in government housing, but you pay child support, you're paid something called BAH-DIFF, which is the difference between the regular BAH that you would receive as a reservist or National Guard personnel and the one you would receive if you lived with dependents. The only restriction on this is that your child support must be at least equal to the differential payment.

There are also situations in which the government may temporarily increase BAH up to 20% to deal with emergency situations that cause a shortage of housing, like natural disasters.

Types of BAH

While we've covered some of this, it's probably useful to have a short breakdown of the different types of BAH:

• Type I: Think of this as full rate.
• Partial: This is a partial allowance for service members living in government housing on the base.
• Type II: Also called BAH Reserve Component/Transit (RC/T), this is for reservists or National Guard members who were temporarily called to active duty or in transit from another area where there wasn't military housing. It's based on a reduced rate.
• BAH-DIFF: Designed for servicemembers who are paying child support, this is for servicemembers who live on base. They get the difference between the single and married rates that would be given to reservists or National Guard personnel to help with the support expenses.

BAH vs. Overseas Housing Allowance (OHA)

BAH applies to housing within the 50 states. If you're posted overseas, including U.S. territories, Overseas Housing Allowance applies. OHA is very similar to BAH, but it also includes a move-in allowance and certain unique expenses that apply in some countries.

How to look up your 2026 BAH rate

The good news is you don’t have to look very far to track this down. We have a BAH calculator. You only need to provide the following information:

• Permanent duty station ZIP code
• Pay grade
• Whether you have dependents

Planning and budgeting with BAH: Financial readiness

When you rent or buy with BAH, there are several considerations to keep in mind:

• Cost-sharing: This is meant to only cover 95% of rent and utility expenses, so service members are expected to share in some of the cost.
• Create a full budget: Service members receive allowances for food and uniforms, but that doesn't include family members, so think about all your costs. You also have to pay for things like internet and cell phone as well as your car.
• Stack benefits: You may qualify for other benefits depending on your situation. For example, there are a couple of family separation allowances, a dislocation allowance for those who need to relocate, and a basic needs allowance for individuals with an income below a certain threshold.
• Plan for military life: Whether you buy or rent, your arrangements should account for the fact that you could be asked to move around quite a bit, depending on where you're assigned as a service member. Be sure to look into all moving resources associated with permanent changes of station.
• Account for seasonality: Because BAH is based on median rent, it may not account for seasonal changes. Additionally, utility usage is very personal – you may run your HVAC systems more or less, for example.

The Office of Financial Readiness has more information and resources for you to check out.

FAQ about BAH

Now that we’ve touched on the basics, let’s shortly cover some of the other questions you may have.

Is BAH taxable income?

BAH is nontaxable. Because of this, lenders may gross up the income when you qualify, meaning your mortgage payment is qualified based on 125% of your BAH, in addition to your other qualifying income.

What factors determine my BAH amount?

The factors that go into your BAH amount include the ZIP code of your permanent duty station, your pay grade, and whether you have dependents.

Why doesn't BAH cover my full rent?

BAH requires that service members share 5% of the rent cost.

Does BAH cover utilities?

BAH covers 95% of the cost of electricity, heat, and water/sewer.

Why is BAH based on my duty location, not where I live?

BAH is intended to give you flexibility in where you live, but it’s based on duty location because there is an assumption that most people will live near the base.

Where can I look at my official 2026 BAH rates?

For official rates, you can check out our BAH calculator.

What is individual rate protection?

Individual rate protection means you keep your current rate even if market rates in your area have gone down. You only receive a reduced rate through a station transfer, pay grade reduction or change in dependency status.

What's the difference between BAH, OHA, and G.I. Bill Monthly Housing Allowance (MHA)?

BAH pays for off-base housing when you’re on active duty within the 50 states. OHA is the overseas version of this, including U.S. territories. MHA is partial coverage of room and board when you’re using your education benefits under the G.I. Bill.

How does child support affect BAH?

You get BAH-DIFF, which is the difference between a full housing allowance and a partial housing allowance, calculated based on Type II BAH that normally applies to reserve or National Guard personnel, as well as those being transferred from non-BAH locations.

Do more dependents increase BAH?

No. It only matters whether you have dependents or not.

Will a promotion change my BAH?

Yes. BAH is based in part on pay grade.

How do temporary local BAH increases work?

The DOD has authority under the Stafford Act to temporarily increase BAH up to 20% in emergency.

The bottom line: BAH can be used for a mortgage

Although calculated based on market rent in the area of the base, BAH is a flexible benefit that can be used to buy a home as well. Because it’s nontaxable, lenders may gross up the amount so you have more to qualify for your mortgage. You’ll receive more or less based on your pay grade and whether you have dependents.

Now that you know how your BAH works, if you’re ready to move forward with a mortgage, apply online!

¹ Rocket Mortgage is a VA-approved lender, not endorsed or sponsored by the Dept. of Veterans Affairs or any government agency.