Uncle Sam offers relocating military personnel some aid
There's nothing like having to relocate during a housing slump to give you heartburn if you're a homeowner, especially if you bought just a few years ago. But if you're in the military, you might be due some help.
The Department of Defense -- which employs a lot of people who have to move around every few years -- has $555 million earmarked to reimburse personnel for some of the difference between their purchase and selling price. That includes BRAC folks, the people moving to Maryland (and elsewhere in the country) for the national base realignment and closure process.
While the initiative "is not designed to pay 100 percent of losses or to cover all declines in value, it can help protect eligible applicants from financial catastrophe due to significant losses in their home values," the DOD said.
Here's how the agency is prioritizing the money, which comes from the February stimulus package:
1. Homeowners wounded, injured, or ill in the line of duty while deployed since Sept. 11, 2001, and relocating in furtherance of medical treatment;2. Surviving spouse homeowners relocating within two years after the death of their spouse;
3. Homeowners affected by the 2005 BRAC round, without the need (which existed under previous law) to prove that a base closure announcement caused a local housing market decline; and
4. Service member homeowners receiving orders dated on or after Feb. 1, 2006, through Dec. 31, 2009, for a permanent change of station (PCS) move. The orders must specify a report-no-later-than date on or before Feb. 28, 2010, to a new duty station or home port outside a 50-mile radius of the service member’s former duty station. These dates may be extended to Sept. 30, 2012, based on availability of funds.
More details about the expanded Homeowners Assistance Program here. Might this apply to you?
And for non-military folks: Have any of you received help from your employer for a relocation?
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Comments
I am a buyer that has a contract for the sale of a home which is pending money from this program. Basically, the sellers could not afford to lose as much money as they would, given the decline in value, except for this program. Also, it could theoretically help me buy a home that would otherwise be a short sale, without having to deal with the downfalls of a short sale.
But there has yet to be any money. And on top of that, now that the DoD has given guidance on the use of the money that is supposedly now starting to flow as of last week, I'm not even sure of the following items (as you can see, I have more questions than answers):
1. Must the house be sold at current market value for a non-short-sale home (our contract appears to maybe be lower than market?) to get government assistance. Or does the program allow for the property to be sold for the reduced market value of this property AS a short-sale.
2. How much money is there, really? Everyone thinks it's $555 million. But I've also read quotes from government officials who say that it's only less than 1% of that, or $5 million. It seems that given the number of applications (at least $4000), that $5mil won't even make a dent in the problem. Our home may not even be covered, because our sellers fall under category 4 (PCS), and are not priority wounded veterans or widows. What is that other $550 million going to be used for?
3. Taxes: If our sellers are not able to bring the money needed to cover income tax to the table, we may be stuck waiting even longer, maybe until the money is all gone. When is Congress going to act to make these benefits tax-exempt?
4.
Posted by: JWC | October 6, 2009 6:31 PM
As a military family and now having experience with the Homeowner's Assistance Program, let me offer you my story. We received PCS orders in May 2009, moving us in July 2009. We put the house up for sale immediately and applied to the HAP program. At the time, because of the market we were already underwater, and could not rent it for enough to cover the mortgage, so short sale was our only option. We got a contract, but the buyer fell through after 6 weeks(August). We got another buyer within 3 weeks and everything continued moving through the banks for approval of short sale. We paid the July mortgage, even though we were already living in another state and paying rent on a house at our new location. The banks took 3 months and we could not continue to keep up both a mortgage and rent for 2 more months. The lenders reported us as behind 60 days. Finally on Nov. 13, the closing happened and the lenders forgave the entire balance of the loans. The problem, because of a military move, beyond our control, and a housing market again, beyond our control, we not cannot buy a house. We make plenty of money, pay our bills on time, but because of this, we cannot own again. We thought we were doing the right thing, but in the end it affected us just as badly. We now have to go back to renting after selling our first home. We put our heart and soul into that house, because it was our first. We wanted to do that again, but are not allowed to.
The problem we have with the HAP program is that even after applying in May, there is still no money being paid out. We have provided more documentation that it took to buy and sell our house and to this day, they are still not approving applications. Even once our application gains an approval, it is too late. We could not just keep a buyer hanging, hoping that HAP would come through. At this point, the only thing we can recover is the $750 we contributed to the closing. That's it. Seems unfair.
Posted by: smith family | December 23, 2009 10:30 AM
I'm sorry to hear that -- you're right that $750 will hardly reimburse you for the damage to your credit. (If you want to buy again as soon as possible, you might want to talk to a credit expert who can give you the likely timeline and suggest ways -- beyond waiting -- to improve your credit score.)
Did you happen to move to or from the Baltimore area?
Posted by: Jamie Smith Hopkins | December 23, 2009 10:39 AM