Thread: DoD Homeowners Assistance Program (HAP)

All,
I sent an email to HQ USAF/A7CAH yesterday. It looks like it will be at least another 60 days before HAP will be able to start processing applications based on the fact that OMB will take another 30 days and then another 30 days on the Federal Register. Wish I had better news, but bad news is better than no news at all. Anyways, here is the response “OSD and HQ Army is aggressively working with the Office of Management and Budget (OMB) to finalize the “rulemaking” and publish in the Federal Register as soon as possible. There are a few issues still being resolved to include income tax liability and full reimbursement for mortgages that are higher than current value of the property. OSD informs they anticipate resolution within the next 30 days. Please be assured, AF leadership is aware of the delays in the implementation and keeping a watch on the progress. Also, the Army Corps of Engineers is position for speedy approval of benefits by already reviewing the applications submitted to date.”

$555 Million DoD Homeowners Assistance Program Details Announced

The Department of Defense (DoD) today announced details for the temporary expansion of the Homeowners Assistance Program (HAP). Using $555 million in funds from the American Recovery and Reinvestment Act (ARRA), this program is designed to partially reimburse eligible military personnel, surviving spouses, and federal civilian employees whose service to the nation has required them to relocate and sell their primary residence at a loss.

Potential eligible personnel include:

- Active and former service members of the Army, Navy, Marine Corps, Air Force, and Coast Guard;

- Civilian employees of the DoD, Coast Guard, and non-appropriated fund activities; and

- Surviving spouses of both fallen service members and civilian employees.

Potential eligible personnel who have sold a primary home for a loss or are considering selling their home are encouraged to visit the DoD HAP Web site (http://hap.usace.army.mil) to check specific program criteria, and if eligible, apply online.

The DoD HAP has been providing financial assistance to military personnel and DoD civilians since 1966, mainly at base realignment and closure (BRAC) sites where government action caused a decrease in market home values. While the HAP expansion 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.

Supporting military families is one of administration's highest priorities and includes leadership and engagement by Michelle Obama and Jill Biden. In February 2009, the Congress provided ARRA funding for a temporary expansion of the HAP to address unique economic pressures faced by military personnel who are forced to relocate during these unusually adverse housing market conditions. After conducting an extensive analysis to determine how best to prioritize the finite funds available while maximizing assistance to as many people as possible, the DoD developed specific eligibility criteria designed to take care of people in the greatest need. These program details have been published in the Federal Register and are now available for public comment.

ARRA funding allows the DoD to temporarily expand HAP to partially reimburse losses from the sale of a primary residence in the following priority order:

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.

Each of these general categories has more specific eligibility requirements which have been updated at the DoD HAP Web site (http://hap.usace.army.mil). The U.S. Army Corps of Engineers executes the program for all the military branches and HAP administrators will immediately start processing applications.

All,

Great news! On October 8, the House of Representatives, by a vote of 416-0, approved H.R.3590, the “Service Members Home Ownership Tax Act of 2009.” The bill heads to the Senate for its consideration.

The bill would make the following changes to improve how the homebuyer credit and Homeowner's Assistance Program (HAP) provisions apply to service members (i.e., members of the uniformed services, members of the Foreign Service, and intelligence employees):

* The tax credit claimed on qualifying first-time home purchases in 2009 must be recaptured if the home is sold (or ceased to be used as a principal residence) within three years of the purchase. A more restrictive recapture rule applies to qualifying first-home purchases in 2008. Sec. 2(a) of the bill would amend Code Sec. 36(f)(4) to provide that the first-time homebuyer credit does not need to be paid back if after Dec. 31, 2008, the home is sold (or stops being used as a principal residence) by a member of the uniformed services, a member of the U.S. Foreign Service, or an employee of the intelligence community, in connection with a government order for qualified official extended duty.
* The first-time homebuyer credit won't be available for purchases after Nov. 30, 2009 (unless Congress extends this tax break). Sec. 3(a) of H.R. 3590 would amend Code Sec. 36(h) to provide those serving on qualified official extended duty service outside of the U.S. for at least 90 days in calendar year 2009 with an additional year (until Nov. 30, 2010) to buy a principal residence and be eligible for the first-time homebuyer credit (if otherwise qualified). Additionally, those buying a home after 2009 but before July 1, 2010 under the change would be able to elect to treat the home as bought on Dec. 31, 2009, in order to claim the credit on the 2009 return.
* Sec. 4(a) of the bill would amend Code Sec. 132(n) to ensure that certain payments under HAP are exempt from tax. This would apply to HAP payments made after Feb. 17, 2009, to (1) wounded members (and their spouses) of the Armed Forces, Department of Defense, or the United States Coast Guard and (2) members of the Armed Forces that bought a home before July 1, 2006 and are subsequently permanently reassigned between July 1, 2006 and Sept. 30, 2012.

Kevin

All,
President Obama signed (HR 3548, Unemployment Compensation Extension Act of 2009) into law and thereby exempted Expanded HAP benefit payments from taxation. Applicants who received benefits and had taxes withheld, may apply for refunds from the Internal Revenue Service when they submit their tax returns.

Kevin