Can I Use My BAH to Qualify for a VA Loan?

Yes! Here is what lenders look for...

If you're active-duty military, there’s a good chance your Basic Allowance for Housing (BAH) makes up a chunk of your income. It can be used to help you qualify for a home loan but there’s a right way to do it, and a lot of lenders (especially the online ones) don’t handle it properly.

What Is BAH and Why It Matters

BAH is tax-free housing income provided to active-duty service members.

It varies based on your:

• Duty station ZIP code
• Rank
• Dependent status (with or without dependents)

Because it’s consistent and non-taxed, lenders love BAH it's simple to use if you understand the basics.

How BAH Is Counted in Your VA Loan Approval

✅ It’s treated like monthly income

✅ It can be used toward your mortgage payment, taxes, insurance, and HOA

✅ It can be "grossed up" since it is tax free income. Here is where things go sideways... there are lenders that don't understand this concept or realize it is allowed with a VA loan so they will short your qualifying income due to their lack of knowledge.

Others don’t verify your base assignment, they count COLA when they shouldn't, or verify continuity of income so underwriting rejects it at the last minute. And I’ll be honest… I’ve had to save more than a few deals because of that.

Real Talk: Your Duty Station Matters

If you're stationed at NAS Lemoore, for example, your BAH could be over $2,100/month (depending on rank and dependents).

Some areas have higher BAH and some lower. Problems arise when lenders go by the BAH amount on the LES versus the BAH amount if you are PCSing to a new area and buying in that area. 

I have personally seen deals fall apart when other lenders did not do their due diligence on this.

Pro Tips for Using BAH Correctly

• Upload your most recent LES (Leave and Earnings Statement)
• Upload your orders (if it will be to a new duty station other than the one reflecting on your LES) and verify your lender is using the correct BAH.
• Notify your lender if you plan on exiting the military in less than a year.
• Make sure your lender understands tax-exempt income
• Get a preapproval based on full income analysis not a guess

And if you're PCSing to California or Viriginia, I can help you get preapproved before you move so you're not scrambling when you get here.

BAH is one of the biggest advantages active-duty buyers have. If your lender isn’t using it properly, you’re leaving buying power on the table.

Let’s fix that.