Military families who purchased a home before July 1, 2006 and face a loss due to service relocation may get help from the government. The home does not need to be financed with a VA loan, but it does have to be their primary residence.
The Homeowner’s Assistance Program, part of the 2009 Stimulus Bill, assists military and Defense personnel forced to sell a home at a loss due to relocation from:
- Military base closure
- Reassignment ordered between July 1, 2006 and September 30, 2012
- Combat wound requiring specialized medical assistance
Surviving spouses of veterans killed in the line of duty are also protected under the bill.
The Secretary of Defense uses allocated money to obtain title to a serviceperson’s property to prevent foreclosure or to reimburse the military member for losses after a private sale.
Some military families are being hit hard by base closures, reassignments and falling real estate prices. And, with summer comes peak season for Permanent Change of Station (PCS). It’s possible that military members could experience more losses due to relocation in today’s market.
The real estate market is still down and a home doesn’t sell as fast or for as much as it used to. In fact, a home could sit unsold for 19 months or even longer. If a home doesn’t sell quickly, the military family could be stuck paying rent in their new location on top of the mortgage for their old house. Two house payments could put a squeeze on anyone’s budget.
Under the law, the government can cover the difference between 95% of the prior fair market value, and the fair market value at the time of the relocation. Originally, the feds had $555 million budgeted for this purpose. However, the recent $26 billion bank settlement includes additional money for the program.
Hurry! Protection only applies to a service member’s primary residences sold through September 30, 2012.