Homeownership for Military Families
For decades, home ownership has been the main path to wealth for most Americans. Today, home equity - the market value of a home minus the balance on any home loans - represents more than four-fifths of the typical family's wealth. So, each home loan payment not only helps pay down the principal and interest on your home, but also builds your wealth. Although, home-ownership for military servicemembers can be a difficult decision to make. Can the home be sold if you receive PCS orders? If not, are you ready to be a landlord? If you are upside-down on your home mortgage right now, what assistance programs are available to you?
Here is some information about the aspects of home-ownership as a servicemember and the available resources that exist to help you along the way.
Links to Resources
How to Shop for a Mortgage - courtesy of saveandinvest.org
Homeownership/Buying a Home - Military.com/money
Pros and Cons of Owning a Home - MilitaryMoney.com
Money and Mobility courtesy of saveandinvest.org
HAP-Homeowners Assistance Program courtesy of saveandinvest.org
Stimulus Bill Expands Military Homeowners Assistance Program
Military homeowners who must sell their primary residence as a result of PCS orders or because of injury or death of a servicemember and suffer financial loss on the sale could receive monetary assistance through the newly expanded Military Homeowners Assistance Program (HAP).
Legislation passed in February 2009 as part of the American Recovery and Reinvestment Act (ARRA) provides $555 million to expand HAP benefits. HAP benefits were previously available only to military homeowners forced to relocate due to base realignment and closures. The new law will give priority to those wounded during deployment and survivors of those killed while deployed.
HAP can provide the following assistance for eligible applicants:
- reimbursement for part of the loss incurred from the sale of a home;
- mortgage assistance if the funds from the sale of a home don’t cover the full cost of the mortgage;
- purchase of the home by paying off the mortgage in full; or
- support in the event of a mortgage default or foreclosure.
It’s important to note that current tax laws require ARRA-expanded HAP applicants be taxed on all benefits above their homes’ current fair market value as part of a servicemember’s gross income. Servicemembers should consider this tax liability as they evaluate the best course of action.
To learn more about the Military Homeowners Assistance Program, including eligibility requirements and benefits, or to contact your local HAP field office, visit http://hap.usace.army.mil/.
For more information about buying or selling a home—including loans, insurance, closing costs and more—see the Additional Resources of the Spending section of SaveAndInvest.org.
New Mortgage Relief for Military, Veterans and FHA Borrowers courtesy of saveandinvest.org
On March 6, 2012, President Barack Obama announced a new housing initiative for servicemembers, veterans and borrowers with mortgages insured by the Federal Housing Administration (FHA).
Under the plan, lenders will be required to review all foreclosures of servicemembers and veterans since 2006. If it’s found that they were wrongly foreclosed upon, lenders must compensate these borrowers.
Other provisions of the plan include:
- a review of denied refinancing requests from servicemembers and veterans, and compensation if it’s found they were wrongly denied the opportunity to refinance;
- relief to servicemembers who were forced due to sell their homes because of Permanent Change of Station orders;
- a $10 million payment from the banks into the Veterans Housing Benefit Program Fund; and
- reduced refinancing fees for FHA borrowers in good standing.
This new agreement is in addition to the landmark settlement on foreclosure and mortgage fraud the federal government and state attorneys general reached in February 2012.
For information on who to contact to see if you’re eligible for relief, see “For Further Questions” on the White House Fact Sheet.Back to For Savers