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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.