a

GAO

United States Government Accountability Office

Report to Congressional Committees

July 2006 RENTAL HOUSING 

PROGRAMS

Excluding 

Servicemembers’ 

Housing Allowances 

from Income 

Determinations Would 

Increase Eligibility, 

but Other Factors May 

Limit Program Use

GAO-06-784
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

July 2006

RENTAL HOUSING PROGRAMS

Excluding Servicemembers’ Housing 

Allowances from Income Determinations 

Would Increase Eligibility, but Other 

Factors May Limit Program Use 

Highlights of GAO-06-784, a report to 

congressional committees 

Although the Department of

Defense (DOD) pays active-duty 

servicemembers who do not live in 

military housing a Basic Allowance

for Housing (BAH) to help them

afford private market residences, 

expected growth at some military 

installations has raised concerns 

about whether nearby communities

will have enough affordable rental

housing for incoming personnel. In 

response to a congressional

mandate, GAO assessed (1) how 

excluding BAH would affect 

servicemembers’ eligibility to apply

for federal rental housing programs 

and (2) factors that could affect 

their use of the programs in

selected communities gaining

military personnel. GAO compared

servicemembers’ eligibility for the

programs as of December 2005 by

including and excluding BAH from

income determinations and 

examined factors affecting

potential program use near four

growing military installations. 

What GAO Recommends

This report contains a matter for 

congressional consideration stating 

that if the primary intent of

excluding BAH from income

determinations for federal rental 

housing programs is to increase the 

supply of affordable rental housing 

for servicemembers, Congress 

should consider first applying such 

a change only to programs that

stimulate housing production. DOD 

commented that servicemembers

should be eligible for federal rental 

housing programs on the same 

terms as their civilian counterparts. 

Excluding BAH from income determinations for federal rental housing 

programs would have substantially increased the percentage of 

servicemembers eligible to apply for the programs as of December 2005, 

assuming military pay was their only income. To be eligible to apply for 

rental assistance programs of the Departments of Housing and Urban 

Development (HUD) and Agriculture (USDA), or to live in units produced by 

the Internal Revenue Service’s (IRS) Low-Income Housing Tax Credit 

program, households must have incomes at or below a specific limit, 

generally 50 percent or 60 percent of the median household income for their 

area. At the 50 percent income limit, 20 percent of servicemembers who 

received BAH would have been eligible if BAH were excluded from income 

determinations, compared with 1 percent with BAH included. Most junior 

enlisted members would have been eligible if BAH were excluded, as would 

have small percentages of senior personnel. However, at all levels, many

would not have been eligible if their households had even modest income 

from other sources. 

Agency and community officials cited factors that could limit the role of 

federal programs in building housing or helping servicemembers afford 

existing units near four installations that GAO examined. DOD officials said 

that servicemembers would be unlikely to need the programs because BAH 

payments provide for the median cost of market-rate housing. Some 

community officials said the tax-credit program, which spurs housing 

production, could be useful if more servicemembers qualified. But 

developers would have to compete for tax credits, and market factors—such 

as the financial feasibility of building units that junior enlisted members 

could afford—could limit their interest. The HUD and USDA programs 

might help some servicemembers rent existing units, but—because the 

programs are not entitlements—servicemembers could face lengthy waits,

and eligible civilians might wait longer for assistance. 

Potential Eligibility for Federal Rental Housing Programs, Assuming December 2005 Military 

Income Was the Only Household Income 

www.gao.gov/cgi-bin/getrpt?GAO-06-784.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David G. Wood 

at (202) 512-8678 or woodd@gao.gov. 
Page i GAO-06-784 Rental Assistance for the Military

Contents

Letter 1

Results in Brief 3

Background 6

Excluding BAH When Determining Income Would Extend Eligibility 

to More Servicemembers, Assuming No Additional Household 

Income 13

Eligibility Aside, Lack of Demand and Other Factors Could Limit 

Servicemembers’ Use of Federal Rental Housing Programs 20

Conclusions 30

Matter for Congressional Consideration 31

Agency Comments and Our Evaluation 31

Appendixes

Appendix I: Objectives, Scope, and Methodology 33

Objectives 33

Scope and Methodology 33

Appendix II: Office of the Under Secretary of Defense 36

Appendix III: GAO Contact and Staff Acknowledgments 39

Tables Table 1: Federal Rental Housing Programs That Support Housing 

Production or Subsidize Tenants’ Rents 11

Table 2: Amount of Additional Income That Would Have 

Disqualified Half of the Married Servicemembers, as of 

December 2005 19

Table 3: Expected Growth in Military Personnel at Four Selected 

Installations 22

Figures Figure 1: Military Compensation Ranges, by Pay Grade, 2006 7

Figure 2: Servicemembers’ Potential Eligibility, by Pay Grade, for 

Federal Rental Housing Programs at the 50 Percent and 

60 Percent of AMI Limits, as of December 2005 15

Figure 3: Servicemembers’ Potential Eligibility, by Family Size, for 

Federal Rental Housing Programs at the 50 Percent and 

60 Percent of AMI limits, as of December 2005 17

Figure 4: Percentage of Servicemembers Potentially Eligible for 

Federal Rental Housing Programs That Were Married or 

Received Other Military Pay, as of December 2005 18
Contents

Page ii GAO-06-784 Rental Assistance for the Military

Figure 5: Servicemembers Potentially Eligible for Tax-Credit Units 

at the 60 Percent of AMI limit, as of December 2005 23

Figure 6: Income Ranges of Housing Choice Voucher Recipients 

and Servicemembers in Selected Pay Grades, 2006 30

Abbreviations

AMI area median income

BAH Basic Allowance for Housing

BAS Basic Allowance for Subsistence

BRAC base realignment and closure 

DOD Department of Defense

HUD Department of Housing and Urban Development

IRS Internal Revenue Service

LIHTC Low-Income Housing Tax Credit

USDA U.S. Department of Agriculture 

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page 1 GAO-06-784 Rental Assistance for the Military

United States Government Accountability Office

Washington, D.C. 20548

A

July 31, 2006 Letr

The Honorable Christopher Bond

Chairman

The Honorable Patty Murray

Ranking Minority Member

Subcommittee on Transportation, Treasury, the Judiciary, 

 Housing and Urban Development, and Related Agencies

Committee on Appropriations

United States Senate

The Honorable Joe Knollenberg

Chairman

The Honorable John W. Olver

Ranking Minority Member

Subcommittee on Transportation, Treasury, and

 Housing and Urban Development, The Judiciary,

 District of Columbia, and Independent Agencies

Committee on Appropriations

House of Representatives

As a result of base closings and realignments and other restationing 

actions, some military installations will be experiencing growth in the next 

several years, raising concerns about whether the nearby communities will 

have an adequate supply of affordable housing for incoming military 

personnel or whether communities can develop such housing. To help 

make housing affordable to servicemembers, and in keeping with its policy 

of relying on the private market as the primary source of housing for 

servicemembers, the Department of Defense (DOD) pays a Basic 

Allowance for Housing (BAH) to servicemembers stationed in the United 

States who do not live in military housing. In fiscal year 2005, DOD made 

about $11.6 billion in BAH payments to approximately 850,000 active-duty 

servicemembers. DOD sets the housing allowance amounts annually to 

cover the median cost of rent, including utilities and renter’s insurance. The 

housing allowance amounts vary according to the location and rank (pay 

grade) of each servicemember, and also vary depending on whether the 

servicemember has any dependents. Servicemembers may choose to spend 

more or less than their allowance amounts on their actual housing 

expenses. 

Although BAH is intended to allow servicemembers to acquire suitable 

housing in the private market, some community leaders and housing 
Page 2 GAO-06-784 Rental Assistance for the Military

developers have argued that federal rental housing programs also offer the 

potential to help provide affordable housing for servicemembers relocating 

to growing installations. The federal programs include the Low-Income 

Housing Tax Credit (LIHTC) and tax-exempt multifamily housing bond 

programs, which are administered by the Internal Revenue Service (IRS) of 

the Department of the Treasury (Treasury) and the states and support 

development of rental housing.1

 Other programs, including public housing 

and programs that subsidize tenants’ rents, are administered by the 

Department of Housing and Urban Development (HUD) and the 

Department of Agriculture (USDA).2

 To be eligible to apply for these 

programs, households must have incomes at or below a specific limit, 

generally 50 percent or 60 percent of the median household income for 

their area, adjusted for family size. (These programs are not entitlements, 

however, and not all eligible households receive assistance.) To help 

servicemembers meet these income eligibility restrictions, proponents of 

using federal programs to address the military’s housing needs have 

proposed excluding BAH from servicemembers’ incomes when 

determining eligibility for the programs.3

Noting concerns about the availability of affordable private housing for 

servicemembers, particularly in rural areas with growing installations, the 

conference report accompanying the fiscal year 2006 Transportation, 

Treasury, Housing and Urban Development, the Judiciary, the District of 

Columbia, and Independent Agencies Appropriations Act directed us to 

report on the potential effect of excluding BAH from income when 

determining eligibility for federal rental housing programs.4

 Accordingly, 

this report discusses (1) how excluding BAH from income determinations 

would have affected the eligibility of servicemembers receiving BAH as of 

December 2005 and (2) programmatic and market factors that could affect 

1

The LIHTC program was established in 1986 to spur the production of rental housing for 

lower-income households at rents they can afford. Tax-credit units are financed in part by 

investors who receive federal income tax credits. In exchange, the units are restricted to 

households with incomes below certain limits for a fixed number of years.

2

Generally, these programs make up the difference between 30 percent of tenants’ adjusted 

incomes and an existing unit’s total rent.

3

H.R. 3186, which was introduced on June 30, 2005, would exclude BAH from being treated 

as income for the purposes of determining eligibility for any HUD or other federal housing 

assistance program.

4

H.R. Conf. Rep. No. 109-307, at 131 (2005); S. Rep. No. 109-109, at 152 (2005).
Page 3 GAO-06-784 Rental Assistance for the Military

eligible servicemembers’ participation in the programs in selected 

communities gaining military personnel. 

To address these objectives, we obtained DOD’s personnel data for 

December 2005 and analyzed 702,975 records of servicemembers who were 

BAH recipients at that time to determine their potential eligibility for 

federal rental housing programs. We included the following federal 

programs: HUD’s public housing, Housing Choice Voucher, and 

project-based Section 8; USDA’s Section 515 Rural Rental Housing Loans 

and Section 521 Rural Rental Assistance; and IRS’s LIHTC and tax-exempt 

multifamily housing bonds. We compared potential eligibility for rental 

housing programs by including and excluding BAH from income eligibility 

determinations. Because data on spousal income and other sources of 

income were unavailable, for this analysis we assumed that the primary 

components of military pay were the only sources of income for the 

servicemember households. We tested the data that we used in our analysis 

and found it sufficiently reliable for our purposes. Furthermore, we 

interviewed and reviewed relevant documentation from installation 

officials, rental housing program officials, and community organization 

representatives in the following four communities near installations 

gaining military personnel: Fort Benning, Georgia; Fort Bliss, Texas; Fort 

Drum, New York; and Fort Riley, Kansas.5

 We cannot generalize the 

information from these installations to all installations that will gain 

military personnel. We conducted our work in and around Washington, 

D.C., and Junction City and Manhattan, Kansas, between November 2005 

and July 2006, in accordance with generally accepted government auditing 

standards. Appendix I contains a more detailed description of our scope 

and methodology.

Results in Brief Excluding BAH from income when determining servicemembers’ eligibility 

for federal rental housing programs would have substantially increased the 

percentage that would have been eligible to apply for the programs as of 

December 2005, assuming the primary components of military pay were 

their only sources of income. More specifically:

5

We selected two rural (Fort Drum and Fort Riley) and two urban (Fort Benning and Fort 

Bliss) installations on the basis of their expected military personnel gains and indications 

that the surrounding communities had initiated planning to address the housing needs of 

incoming servicemembers.
Page 4 GAO-06-784 Rental Assistance for the Military

• Using an income limit of 50 percent of the area median, approximately 

20 percent of the servicemembers would have been eligible, compared 

with the less than 1 percent that were eligible with BAH in income 

determinations. 

• Using a higher limit of 60 percent of area median (which applies only to 

some LIHTC and tax-exempt multifamily housing bond properties) 

approximately 40 percent of the servicemembers would have been 

eligible.

• Some increase in eligibility would have occurred at all servicemember 

pay grades, but the greatest impact would have been at the lower pay 

grades. For example, 65 percent or more of servicemembers in the 

lowest pay grades would have been eligible to apply for the federal 

programs, whereas very small percentages of senior servicemembers 

and officers would have been eligible. 

• The increase in eligibility would have affected servicemember families 

of all sizes, but those with the largest families (nine or more persons) 

would have been somewhat more likely to be eligible because the 

programs’ income limits increase with family size. 

Although we lacked data on servicemember household incomes from 

nonmilitary sources, DOD data show that at least 80 percent of the 

potentially eligible servicemembers were married; thus, these households 

could have had additional income earned by a spouse. Using an income 

limit of 50 percent of the area median, we estimated that additional annual 

income of about $4,000 would have disqualified half of the married 

servicemembers who were potentially eligible for the federal programs, 

even if BAH were excluded from income determinations.

In the four communities we examined, programmatic and housing market 

factors—for example, a potential lack of demand for the programs among 

servicemembers, the costs of developing new housing, and the limited 

availability of rental assistance—may limit the extent to which the federal 

programs would help developers increase housing supply or help 

servicemembers afford existing housing. DOD officials said that 

servicemembers would be unlikely to need federal rental housing programs 

because BAH payments cover median local housing costs and would adjust 

annually to reflect any increases in market rents that resulted from 

increased demand for housing near growing installations. Yet, some 

community officials cited the LIHTC program as a potential tool to build 
Page 5 GAO-06-784 Rental Assistance for the Military

more housing for which incoming servicemembers might qualify, but only if 

BAH were excluded when determining eligibility so that more 

lower-income servicemembers could live in the new tax-credit units. 

However, even if more servicemembers were eligible, LIHTC-funded 

development still might not occur near the installations because the state 

agencies that award available tax credits have a variety of priorities. 

Furthermore, market conditions could make developers more or less likely 

to consider using LIHTC to finance their projects. For example, developers 

might be more disposed to seek LIHTC financing for projects near Fort 

Riley, Kansas, because a substantial number of incoming servicemembers 

likely will be low-ranking personnel with families—a population that might 

have more difficulty affording market-rate units than the more senior 

servicemembers. In contrast to the LIHTC program, the HUD and USDA 

programs generally do not support production of new housing, but rather 

subsidize rents for tenants of existing units. However, because these 

programs are not entitlements, the limited availability of assistance may 

preclude eligible servicemembers from using them, especially in areas with 

long lists of civilian applicants already awaiting assistance, according to 

agency and community officials. Finally, to the extent that more 

servicemembers applied for these programs, lower-income civilians might 

face longer times on waiting lists for rental assistance because of the larger 

pool of applicants. 

If the primary intent of excluding BAH from income determinations for 

federal rental housing programs is to increase the supply of rental housing 

that servicemembers with the lowest incomes could afford, Congress 

should consider first applying such a change only to programs intended to 

stimulate production of such housing, such as LIHTC and tax-exempt 

multifamily housing bonds. 

We provided a draft of this report to DOD, HUD, IRS, Treasury, and USDA. 

DOD, HUD, and IRS provided technical comments, which we incorporated 

in the final report as appropriate. USDA and Treasury declined to comment 

on the draft report. DOD commented that BAH does an excellent job of 

achieving the objective of providing servicemembers with the same quality 

and quantity of housing that their civilian counterparts can afford, and the 

department noted that in cases of sudden shortages, BAH rates would 

increase to allow servicemembers to bid competitively for housing. DOD 

also stated that servicemembers should be eligible for federal rental 

housing programs under the same terms as their civilian counterparts. 

DOD’s comments are discussed in the Agency Comments and Our 
Page 6 GAO-06-784 Rental Assistance for the Military

Evaluation section of this report, and its written comments appear in 

appendix II. 

Background BAH, one of several components of military compensation, is intended to 

provide servicemembers with an allowance to enable them to obtain 

suitable housing when military-owned housing is not provided. 

Accordingly, BAH payments reflect the cost of housing where 

servicemembers are stationed, and the payments change annually in 

response to increases or decreases in local housing costs. Still, the most 

recent base realignment and closure (BRAC) process, among other 

restationing actions, will cause movement of large numbers of military 

personnel to communities that initially may lack enough private housing 

that is affordable to most servicemembers. Several HUD, USDA, and IRS 

rental housing programs that are intended to make housing affordable to 

low-income households count BAH as income when assessing the 

eligibility of active-duty servicemembers.

Military Compensation 

Incorporates Basic Pay, 

Allowances, and Bonuses

BAH is one of several elements of regular military compensation.6

Regardless of whether they live in military-owned housing or receive BAH, 

servicemembers receive basic pay and a Basic Allowance for Subsistence 

(BAS). BAH and BAS are not subject to federal income tax. With the 

addition of average BAH payments to the other two pay elements, regular 

military compensation in 2006 starts at $26,401 for the lowest-ranking 

enlisted servicemembers and culminates at $183,196 for the 

highest-ranking officers, excluding consideration of any tax advantage 

because the allowances are not subject to federal income tax (see fig. 1).

6

Congress developed the concept of “regular military compensation” to compare military 

and civilian compensation. Regular military compensation includes basic pay, BAH, the 

Basic Allowance for Subsistence, and the federal income tax advantage that accrues 

because the allowances are not subject to federal income tax. The tax advantage is the 

additional income military personnel would have to earn to receive their current take-home 

pay if the allowances were taxed. Because federal rental housing programs do not consider 

the value of the tax advantage when determining eligibility, we did not factor it into our 

analysis. 
Page 7 GAO-06-784 Rental Assistance for the Military

Figure 1: Military Compensation Ranges, by Pay Grade, 2006

Note: This figure reflects the cash components of regular military compensation and does not include 

the value of the tax advantage that accrues to servicemembers because BAH and BAS are not subject 

to federal income tax.

In addition to the primary elements of military compensation shown in 

figure 1, servicemembers with duty stations in more than 55 continental 

U.S. locations, where nonhousing expenses exceed the national average by 

Pay

grade

E-1

E-2

E-3

E-4

E-5

E-6

E-7

E-8

E-9

W-1

W-2

W-3

W-4

W-5

O-1

O-2

O-3

O-4

O-5

O-6

O-7

O-8

O-9

O-10

52,341

87,898

209,989

259,569

241,448

166,613

92,852

26,743

10,330

2,470

6,113

4,291

2,111

558

20,806

36,404

67,184

43,489

29,231

12,580

443

294

117

30

$3,267

3,267

3,267

3,267

3,267

3,267

3,267

3,267

3,267

2,250

2,250

2,250

2,250

2,250

2,250

2,250

2,250

2,250

2,250

2,250

2,250

2,250

2,250

2,250

$8,997

9,373

9,350

9,552

11,194

11,894

12,649

14,355

15,255

8,875

13,153

14,550

15,787

17,950

11,029

12,915

15,461

18,392

20,133

21,639

25,774

25,774

25,774

25,774

$12,001

12,007

12,544

12,388

13,694

15,763

16,315

17,456

18,907

13,626

16,359

17,790

17,632

19,194

13,514

15,167

17,957

21,056

23,527

24,908

28,947

28,947

28,947

28,947

$14,137 - $15,282

(no range) 17,129

18,014 - 20,304

19,955 - 24,221

21,769 - 30,319

23,756 - 35,982

27,464 - 49,363

39,510 - 55,242

48,265 - 64,728

28,336 - 45,277

32,087 - 52,549

36,479 - 60,390

39,946 - 69,732

68,641 - 75,733

28,994 - 45,292

33,397 - 53,528

38,657 - 67,115

43,967 - 73,411

50,958 - 86,573

61,128 - 106,096

82,472 - 120,798

99,252 - 136,184

140,274 - 150,307

(no range)151,999

$26,401 - $30,550

29,769 - 32,403

30,631 - 36,115

32,774 - 39,876

36,230 - 47,280

38,917 - 55,012

43,380 - 68,945

57,132 - 75,965

66,787 - 86,902

39,461 - 61,153

47,490 - 71,158

53,279 - 80,430

57,983 - 89,614

88,841 - 97,177

42,273 - 61,056

48,562 - 70,945

56,368 - 87,322

64,609 - 96,717

73,341 - 112,350

85,017 - 133,254

110,496 - 151,995

127,276 - 167,381

168,298 - 181,504

180,023 - 183,196

Privates,

Airmen,

Seamen

Corporals,

Petty Officers,

Sergeants

Sergeants First 

Class, Chief

Petty Officers, 

Master Sergeants,

First Sergeants, 

Sergeant Majors

Warrant Officers

Chief

Warrant

Officers

Lieutenants, 

Ensigns,

Lieutenants

Junior Grade,

Captains

Majors, Lieutenant

Commanders, 

Lieutenant Colonels,

Commanders,

Colonels, Captains

Generals, Admirals

Typical

servicemember

rank Number of personnel Basic pay range BAS

Without

dependent

With

dependent

Total compensation range

Average BAH

Sources: GAO and DOD.

0 50 100 150 200
Page 8 GAO-06-784 Rental Assistance for the Military

at least 8 percent, receive a cost-of-living allowance. Servicemembers also 

may receive other types of pay, allowances, or bonuses, depending on their 

professional backgrounds, skills, or duties. For example, servicemembers 

may receive special pay for hardship duty or exposure to hostile fire, 

allowances when they are separated from their families because of a 

change in station or a temporary duty assignment, and bonuses for 

enlistment and reenlistment.7

According to DOD officials, in March 2006, about 950,000 personnel lived in 

private housing (including privatized military family housing) and received 

BAH—including roughly 70 percent of active-duty servicemembers in the 

United States, as well as some activated reservists and servicemembers 

stationed overseas whose dependents lived in the United States.8

 DOD 

generally requires enlisted servicemembers in the lowest ranks who do not 

have dependents to live on base in furnished living quarters, commonly 

referred to as barracks. These enlisted servicemembers do not receive 

BAH.

Each year, DOD sets BAH rates (i.e., the allowances servicemembers 

receive monthly) that are based on the median local monthly cost of 

housing, including current market rents, utilities, and renter’s insurance. 

The amounts that servicemembers receive also are based on their pay 

grades and whether they have dependents. To calculate BAH rates for 

different pay grades, DOD uses six standard categories of 

housing—ranging from an one-bedroom apartment to a four-bedroom, 

single-family detached house—that are intended to match the housing 

normally occupied by civilians with comparable incomes. DOD applies 

separate categories to servicemembers with and without dependents, but 

the number of dependents does not affect the BAH amount.

BAH rates have increased since 2000 as DOD implemented an initiative to 

reduce servicemembers’ out-of-pocket housing costs. Prior to 2005, the 

BAH rate for each area and pay grade was the local median monthly 

7

GAO, Military Personnel: Active Duty Benefits Reflect Changing Demographics, but 

Opportunities Exist to Improve, GAO-02-935 (Washington, D.C.: Sept. 18, 2002). This report 

describes the types of military pay, allowances, bonuses, and benefits.

8

Privatized housing normally is located on military installations. Private developers own, 

operate, and maintain the housing. As do families who live in private housing in the local 

community, families in privatized housing use their BAH to pay rent and typical utility costs. 

Families and servicemembers without dependents in military-owned housing receive 

housing and utilities in lieu of BAH.
Page 9 GAO-06-784 Rental Assistance for the Military

housing cost minus a percentage of the national median monthly housing 

cost. That deduction represented the amount that servicemembers would 

have to pay out of pocket if their actual housing costs exactly matched the 

median local housing cost for their pay grade. In 2000, the deduction was 19 

percent of the national median housing cost. DOD gradually reduced the 

deduction so that, by 2005, BAH rates equaled the median housing cost for 

each area and pay grade. Furthermore, while the housing allowance is 

calculated on the basis of the rental market, servicemembers may choose 

to apply their allowance toward purchasing a home, and they are free to 

spend more or less than their allowance on housing.

We reported in April 2006 that the increases in BAH rates had made it 

possible for more servicemembers to afford private housing in the local 

market, thus reducing the need for privatized housing at installations.9

 This 

has recently contributed to lower-than-expected occupancy rates at some 

privatized housing projects. If some privatized projects persistently 

experience lower-than-expected occupancy rates, they could encounter 

financial difficulties or, at worst, failures. To avoid such concerns in future 

privatization projects, we recommended that DOD determine how 

increased BAH rates would affect installations’ housing requirements and 

provide guidance on how the services should incorporate this information 

into their assessments of the need for privatized family housing.

More Than 100 Installations 

Will Gain Personnel through 

the 2005 BRAC Process 

The National Defense Authorization Act for Fiscal Year 2002 authorized a 

new BRAC process in 2005. This was the fifth such process in the last two 

decades, but the first since 1995.10 As in previous processes, Congress 

enacted the legislation to close unneeded bases and realign others. On 

November 9, 2005, Congress accepted in their entirety the most recent 

BRAC recommendations for base closings and realignments. DOD has 6 

years, or from 2005 until September 15, 2011, to implement these 

recommendations. 

The 2005 BRAC process affects a substantial number of communities 

surrounding installations that are expected to experience considerable 

9

GAO, Military Housing: Management Issues Require Attention as Privatization 

Program Matures, GAO-06-438 (Washington, D.C.: Apr. 28, 2006). This report is the latest in 

a series of GAO reports on DOD’s housing privatization program. 

10Pub. L. No. 107-107, Title XXX (Dec. 28, 2001).
Page 10 GAO-06-784 Rental Assistance for the Military

growth in military personnel. While scores of installations will gain or lose 

military personnel, more than 20 installations each are expected to gain 

between 2,000 and 21,000 military, civilian, and mission-support contractor 

personnel.11 For the most part, installations with the largest gains are 

located in predominantly urban counties. However, some installations are 

in rural areas that may have less housing available, raising the possibility 

that incoming personnel initially could face a shortage of nearby housing 

that is affordable to them.12 The installations that will gain the most 

personnel through BRAC are Department of the Army installations, with 

their gains attributable to actions such as the consolidation of various 

activities and the return of personnel from overseas locations under DOD’s 

integrated global presence and basing strategy. In addition to shifts related 

to BRAC, the Army is realigning personnel as it changes its force structure. 

Many Federal Rental 

Housing Programs Include 

BAH in Income 

Determinations

Various HUD, USDA, and IRS rental housing programs are intended to 

make housing affordable for lower-income renters. None of the federal 

agencies that administer these programs maintain data on the number of 

participating servicemembers. The programs either support the production 

of new or rehabilitated rental housing for eligible families or subsidize 

tenants’ rents to make existing units affordable (see table 1). Specifically: 

• Among the production programs, LIHTC and Section 515 Rural Rental 

Housing Loans require property owners to restrict the rents that eligible 

tenants pay. The rent on each tax-credit unit generally cannot exceed 30 

percent of the applicable income limit, adjusted for the number of 

bedrooms. Tenants pay 30 percent of their adjusted incomes toward the 

rent on Section 515 units. The tax-exempt multifamily housing bonds 

program requires units to be set aside for eligible families, but the rents 

on these units generally do not have to be restricted. 

• Rental assistance programs make payments to property owners to make 

up the difference between an eligible tenant’s rent contribution 

(generally, 30 percent of adjusted monthly income) and a unit’s total 

11Defense Base Closure and Realignment Commission, 2005 Defense Base Closure and 

Realignment Commission Report to the President (Washington, D.C.: Sept. 8, 2005).

12Although this report focuses on the housing needs of servicemembers near growing 

installations, civilians would also be affected by any housing shortages or other changes in 

housing market conditions that resulted from installation growth. In addition, problems of 

housing availability could affect urban, as well as rural, communities. 
Page 11 GAO-06-784 Rental Assistance for the Military

rent. The Housing Choice Voucher program offers tenant-based rental 

assistance that tenants can use to rent privately owned apartments or 

single-family homes, and that they can transfer to new residences if they 

move. In contrast, the project-based Section 8 and Section 521 Rural 

Rental Assistance programs offer project-based rental assistance, which 

is attached to specific properties and is available to tenants only when 

they are living in units at these properties.

• Public housing also subsidizes tenants’ rents. However, rather than 

making rental assistance payments to owners that are keyed to tenants’ 

rent payments, HUD provides public housing agencies with annual 

operating subsidies that are based partly on the property’s projected 

overall rental income. 

Table 1: Federal Rental Housing Programs That Support Housing Production or Subsidize Tenants’ Rents 

Sources: GAO, HUD, IRS, and USDA.

Federal 

agency Program Program type Description

HUD Housing Choice 

Voucher

Rental assistance Provides tenant-based rental assistance for households with extremely low; 

very low; and, on an exception basis, low incomes 

Public housing Rental assistance Provides subsidized housing operated by public housing authorities for 

households with extremely low to low incomes

Project-based Section 8

rental assistance

Rental assistance Provides project-based rental assistance in multifamily properties for 

households with extremely low, very low, and (in certain properties) low 

incomes

IRS Low-Income Housing 

Tax Credit

Production Through the allocation of federal tax credits by state agencies, provides an 

incentive for investment in development of multifamily housing that sets aside 

a portion of units for households with very low incomes or incomes at or below 

60 percent of the area median income

Tax-exempt multifamily 

housing bonds

Production Allows government entities to issue tax-exempt bonds whose proceeds 

finance private rental properties that set aside a portion of units for 

households with very low incomes or incomes at or below 60 percent of the 

area median income

USDA Section 515 Rural 

Rental Housing Loans

Production Makes loans for the construction and rehabilitation of rural multifamily 

properties for households with very low to moderate incomes

Section 521 Rural 

Rental Assistance

Rental assistance Provides project-based rental assistance to tenants with very low and low 

incomes in Section 515 and other USDA-financed multifamily properties
Page 12 GAO-06-784 Rental Assistance for the Military

All of these federal programs use a common definition of income as set out 

in a HUD regulation.13 Under this definition, incomes of servicemember 

households include all regular pay, special pay, and allowances (including 

BAH) of the servicemember, except special pay to servicemembers who 

are exposed to hostile fire. Each program determines households’ 

eligibility to apply by comparing their incomes with an income limit, 

expressed as a percentage of the area median.14 The income limits are 

adjusted for family size, with higher limits for larger families. In addition, 

the HUD and USDA programs use tenant income (with certain 

adjustments) to determine how much of a unit’s rent the tenant will pay.

The programs generally target various categories of households, defined 

according to the relationship between a household’s income and the local 

area median income (AMI): extremely low (household income is no more 

than 30 percent of AMI), very low (no more than 50 percent of AMI), low 

(no more than 80 percent of AMI), and moderate (no more than $5,500 

above 80 percent of AMI). In addition to these categories, the LIHTC and 

tax-exempt multifamily housing bond programs can target households with 

incomes that are no more than 60 percent of AMI. For purposes of this 

report, we focused on the 50 percent and 60 percent of AMI limits because 

they generally apply to new applicants for the two largest federal rental 

housing programs, Housing Choice Voucher and LIHTC.15

13The HUD regulation (24 C.F.R. § 5.609) implements a provision of the United States 

Housing Act of 1937, as amended, which broadly defines “income,” for the purposes of 

public housing, project-based Section 8, and Housing Choice Vouchers, as income from all 

sources from each member of a household (42 U.S.C. § 1437 a(b)(4)). By statute, USDA’s 

Section 515 Rural Rental Housing Loans and Section 521 Rural Rental Assistance programs 

and IRS’s LIHTC and tax-exempt multifamily housing bond programs also follow HUD’s 

method of calculating income (§ 515(q) of the Housing Act of 1949, as amended (42 U.S.C. § 

1485(q)) and § 42(g)(4) and § 142(d)(2)(B) of the Internal Revenue Code of 1986, as 

amended (26 U.S.C. § 42(g)(4) and § 142(d)(2)(B))). HUD’s HOME Investment Partnerships 

program—which provides funds to states and localities for construction or rehabilitation of 

affordable housing, rental assistance, and homeownership assistance—allows participating 

jurisdictions to use one of three income definitions, including this regulatory definition. 

14HUD annually estimates median incomes for metropolitan areas and nonmetropolitan 

counties. By definition, half of the households within an area have incomes below the 

median, and half have incomes above it.

15Although the very low income limit (household income at or below 50 percent of AMI) 

generally applies to Housing Choice Voucher applicants, the program admits some new 

tenants with low incomes on an exception basis. However, at least 75 percent of new 

participants each year must have extremely low incomes. (Similarly, each year, at least 40 

percent of new participants in public housing and project-based Section 8 must have 

extremely low incomes.)
Page 13 GAO-06-784 Rental Assistance for the Military

The federal rental housing programs are not entitlements and, as a result, 

do not assist all households that HUD has identified as having housing 

needs—that is, households with very low incomes that pay more than 30 

percent of their income for housing, live in substandard housing, or both. 

According to HUD data for 2003, federal rental housing programs assisted 

an estimated 4.3 million households, or 27 percent of all renter households 

with very low incomes.16 Over 9 million renter households with very low 

incomes (about 59 percent) did not receive federal assistance and had 

housing needs. Of these 9 million households, over 5 million had what HUD 

terms “worst case” needs—that is, they paid over half of their income in 

rent, lived in severely substandard housing, or both.

Excluding BAH When 

Determining Income 

Would Extend 

Eligibility to More 

Servicemembers, 

Assuming No 

Additional Household 

Income

Assuming that the primary components of military pay were the only 

sources of servicemembers’ household incomes, excluding BAH payments 

from income when determining servicemembers’ eligibility for federal 

rental housing programs would have substantially increased the percentage 

that would have been eligible to apply for the programs as of December 

2005. Specifically, most junior enlisted members would have been eligible 

for the programs, as would have much smaller percentages of senior 

servicemembers. In addition, although few in number, servicemembers 

with the largest families (nine or more persons) would have been 

somewhat more likely to be eligible for the programs than those with 

smaller families. However, to the extent that servicemembers’ households 

had income from nonmilitary sources, fewer of them would have been 

eligible for the federal programs. We lacked data on servicemember 

household incomes from nonmilitary sources, but at least 80 percent of the 

potentially eligible servicemembers were married, and income earned by 

spouses would likely have disqualified many of these households. 

Most Junior Enlisted 

Members and Some Senior 

Members Would Have Been 

Eligible if Military Pay Were 

Their Sole Source of Income

Assuming that the primary components of servicemembers’ military pay 

were their only sources of household income in 2005, we found that by 

excluding BAH from income determinations, 19.9 percent of 

servicemembers of all grades would have been eligible for federal rental 

housing programs that used an income limit of 50 percent of AMI,

16U.S. Department of Housing and Urban Development, Office of Policy Development and 

Research, Affordable Housing Needs: A Report to Congress on the Significant Need for 

Housing (Washington, D.C.: December 2005).
Page 14 GAO-06-784 Rental Assistance for the Military

compared with less than 1 percent of servicemembers with BAH included.17

Similarly, at the 60 percent of AMI limit, 39.3 percent of the 

servicemembers would have been eligible if BAH were excluded when 

determining income, compared with 4.8 percent if BAH were included (see 

fig. 2).18 At both income limits, most junior enlisted members (for our 

purposes, E-1 through E-4) would have been eligible for the programs if 

BAH were excluded.19 Specifically, at the 50 percent of AMI limit, 

substantial majorities of E-1s (92.4 percent), E-2s (78.7 percent), and E-3s 

(65.2 percent) would have been eligible. At the 60 percent of AMI limit, 

virtually all E-1s (99 percent) and E-2s (97.6 percent) and substantial 

majorities of E-3s (90.2 percent) and E-4s (64.6 percent) would have been 

eligible.

17We used the 50 percent of AMI limit because it generally applies to HUD’s Housing Choice 

Voucher program and other federal rental housing programs, as well as to tax-credit 

properties that set aside units for households at this income level.

18The 60 percent of AMI limit only applies to properties financed with tax-credits or 

tax-exempt multifamily housing bonds that set aside units for households at this income 

level. 

19We calculated the annual incomes of 702,975 servicemembers who were receiving BAH, 

using their December 2005 payments for basic pay; BAH; BAS; and, where applicable, a 

cost-of-living adjustment for servicemembers in high-cost areas. We compared their 2005 

military pay with the program income limits that were in effect at the end of 2005. Because 

we did not have data on other sources of income, such as spousal pay, we assumed that the 

servicemembers’ military pay was the only source of household income. Our analysis 

cannot be used to determine the specific impact of a future change in income 

determinations. Changes in servicemembers’ incomes or duty locations and annual 

adjustments to programs’ income limits would affect their future eligibility.
Page 15 GAO-06-784 Rental Assistance for the Military

Figure 2: Servicemembers’ Potential Eligibility, by Pay Grade, for Federal Rental Housing Programs at the 50 Percent and 60 

Percent of AMI Limits, as of December 2005 

Note: This figure shows the potential eligibility to apply for federal rental housing programs among 

servicemembers who were receiving BAH as of December 2005, based on the payments they 

received that month for basic pay; BAS; BAH; and, where applicable, a cost-of-living adjustment for 

servicemembers living in high-cost areas. These data were from DOD’s Active Duty Pay and Active 

Duty Military Personnel Master File systems. This analysis assumes that the primary components of 

O-1 - O-10

All

W-1 - W-5

E-9

E-8

E-7

E-6

E-5

E-4

E-3

E-2

E-1

0.0

0.0

0.0

0.0

0.1

0.4

1.5

3.6

6.9

15.1

1.0

0.3

0.0

0.6

3.0

9.4

19.2

35.6

65.2

78.7

92.4

144

1

1

7

128

1,350

6,186

11,863

9,534

2,838

1,869

1,797

145

41

980

8,995

38,235

82,139

83,923

46,577

9,282

3,912

0.2

0.0

0.0

0.0

0.2

1.0

3.5

9.1

18.5

29.8

47.3

2.0

3.4

0.5

4.5

12.0

28.8

47.1

64.6

90.2

97.6

99.0

0

1

0

5

68

669

1,953

1,872

657

595

876

52 0.1

19.9

33,921

276,026

4.8

140,234 39.3

5,872 0.8

19

1

139

2,232

12,494

33,455

46,192

33,688

7,486

3,652

Number Percent Number Percent

50% of the area median income limit 60% of the area median income limit

Eligible servicemembers

Pay grade

Eligible with BAH

Eligible without BAH

Sources: GAO and DOD.
Page 16 GAO-06-784 Rental Assistance for the Military

military pay were servicemembers’ only sources of income; income from other sources would reduce 

the percentage of eligible servicemembers.

In addition, using the same assumption that household income included 

only the primary components of military pay, some senior enlisted 

members and officers would have been eligible for the programs if income 

determinations excluded BAH. Specifically, at the 50 percent of AMI limit, 

19.2 percent of E-5s and 9.4 percent of E-6s would have been eligible, as 

would have very small percentages of servicemembers in pay grades E-7 

through E-9 (see fig. 2). The percentage of eligible officers also would have 

been very small, as follows: 1 percent using the 50 percent of AMI limit, and 

2 percent using the 60 percent of AMI limit.

Excluding BAH, More 

Servicemembers with 

Families of All Sizes Would 

Have Been Eligible, 

Especially Larger Families

Again assuming that the primary components of military pay were the only 

sources of household income, by excluding BAH from income 

determinations, considerable percentages of servicemembers with families 

of all sizes would have been eligible for the programs, using either the 50 

percent or 60 percent of AMI limit. However, because the programs’ income 

limits increase with family size, servicemembers with larger families 

(although relatively few in number) generally would have been more likely 

to be eligible than those with smaller families (which were much greater in 

number). For example, with BAH in income determinations, 6.6 percent 

(59) of the largest families (those with nine or more persons) would have 

been eligible for programs using the 50 percent of AMI limit, compared 

with 0.5 percent (866) of the smallest (two-person) families (see fig. 3).20

With BAH excluded, 40.6 percent (361) of the largest families would have 

been eligible, compared with 23.7 percent (45,262) of the smallest families. 

The same general pattern held true for programs using the 60 percent of 

AMI limit. For example, 63.8 percent (568) of the largest families and 44.5 

percent (84,999) of the smallest families would have been eligible if BAH 

were excluded from income determinations.

20Figure 3 shows that some servicemembers without dependents (i.e., a family size of one) 

who were receiving BAH also would have been eligible for the programs. Junior enlisted 

members without dependents who were required to live in barracks were not included in 

our analysis because they did not receive BAH.
Page 17 GAO-06-784 Rental Assistance for the Military

Figure 3: Servicemembers’ Potential Eligibility, by Family Size, for Federal Rental Housing Programs at the 50 Percent and 60 

Percent of AMI limits, as of December 2005

Note: This figure reflects the potential eligibility of servicemembers to apply for federal rental housing 

programs as of December 2005, assuming that the primary components of military pay were the only 

sources of household income.

9 or

more

All

8

7

6

5

4

3

2

1

6.6

4.4

3.0

1.9

1.4

1.2

1.1

0.5

0.1

40.6

35.6

30.1

25.7

20.8

19.5

24.4

23.7

8.9

203

372

904

2,021

4,534

8,024

8,223

7,044

2,596

568

1,125

3,504

10,654

26,430

51,455

60,840

84,999

36,451

22.8

18.5

13.6

9.0

7.0

5.9

5.9

3.7

1.8

63.8

56.1

52.7

47.6

41.0

38.0

44.0

44.5

25.7

59

88

197

436

914

1,644

1,494

866

174

4.8

39.3

361

714

2,000

5,759

13,414

26,478

33,672

45,262

12,574

Number Percent Number Percent

50% of the area median income limit 60% of the area median income limit

Eligible servicemembers

Family

size

19.9

33,921

140,234 276,026

5,872 0.8

Eligible with BAH

Eligible without BAH

Sources: GAO and DOD.
Page 18 GAO-06-784 Rental Assistance for the Military

Additional Household 

Income Would Reduce the 

Number of Eligible 

Servicemembers

To the extent that servicemembers had additional sources of household 

income, their actual eligibility for the federal rental housing programs 

would have been less than the percentages shown in our analysis. 

Additional sources of household income could include income on assets 

(such as savings accounts or mutual funds), employment of other 

household members, or types of military pay that we did not include in our 

analysis.21 For example, figure 4 shows that—at both program income 

limits and with BAH included in or excluded from income 

determinations—at least 80 percent of the potentially eligible 

servicemembers were married and, thus, could have had additional income 

earned by a spouse. In addition, at least 9 percent of the potentially eligible 

servicemembers received other types of military pay. 

Figure 4: Percentage of Servicemembers Potentially Eligible for Federal Rental 

Housing Programs That Were Married or Received Other Military Pay, as of 

December 2005

Note: Although we knew the percentage of servicemembers that received other military pay in 

December 2005, we excluded such payments from our analysis because we lacked a reliable method 

to estimate the total amount of other military pay received in 2005 using data from a single month. 

To illustrate how additional sources of household income could affect 

eligibility for the federal rental housing programs, we calculated the 

amounts of additional income it would take to disqualify married 

servicemember households that would have been eligible on the basis of 

21As previously noted, servicemembers can earn various types of special pay, allowances, 

and bonuses (e.g., additional pay for certain skills, such as proficiency in a foreign 

language). 

60%

50%

11

9

17

15

86

90

80

84

Were married Received other pay

Percentage of eligible servicemembers that:

Income limit

Eligible with BAH

Eligible without BAH

Sources: GAO and DOD.
Page 19 GAO-06-784 Rental Assistance for the Military

their military incomes alone. We found that, among the married 

servicemembers who were potentially eligible with BAH included in 

income determinations, income from even part-time, minimum-wage work 

by their spouses likely would have disqualified many from the federal 

programs. The same was true even if BAH were excluded from income 

determinations. For example, with BAH included, spousal income of $2,004 

would have been enough to disqualify half of the married servicemembers 

that were potentially eligible for programs using the 50 percent of AMI limit 

(see table 2). With BAH excluded, spousal income of $4,044 would have 

been enough to disqualify half of the married servicemembers that were 

potentially eligible. At the 60 percent of AMI limit, $3,108 in spousal income 

would have disqualified half of the potentially eligible married 

servicemembers with BAH included in income determinations, compared 

with $6,180 if BAH were excluded. As shown in table 2, these amounts 

represent part-time work of 24 hours per week or less at the federal 

minimum wage. 

Table 2: Amount of Additional Income That Would Have Disqualified Half of the Married Servicemembers, as of December 2005

Sources: GAO and DOD.

a

For married servicemembers who were potentially eligible at each income limit, we calculated the 

median amount of additional income (such as spousal income) that would have disqualified them. This 

table presents the amount of spousal income that would have disqualified half of the married 

servicemembers.

b

We calculated the hours per week (assuming 50 weeks of work per year at the federal minimum 

wage, that is, $5.15 per hour) needed to earn the additional income that would have made half of the 

married servicemembers ineligible.

Income limit

BAH included in or excluded 

from income determinations 

Income that would have 

disqualified half of the married 

servicemembersa

Hours per week at minimum 

wageb

50 percent of AMI limit Included $2,004 8

Excluded 4,044 16

60 percent of AMI limit Included 3,108 12

Excluded 6,180 24
Page 20 GAO-06-784 Rental Assistance for the Military

Eligibility Aside, Lack 

of Demand and Other 

Factors Could Limit 

Servicemembers’ Use 

of Federal Rental 

Housing Programs

Agency officials and representatives from the four communities we 

examined described factors that may limit the role of federal rental housing 

programs in increasing the supply of housing or helping servicemembers 

afford existing housing, regardless of how BAH affects their eligibility. 

DOD officials said that servicemembers would be unlikely to need federal 

rental housing programs because BAH rates cover median local housing 

costs and would adjust annually to reflect any increases in market rents 

that resulted from increased demand for housing near growing 

installations. Yet, some community officials said that the LIHTC program 

could be used to build more affordable housing if more servicemembers 

were eligible. However, states would have to award tax credits to projects 

in these communities, and housing market factors—such as the financial 

feasibility of building market-rate units with rents that low-ranking 

servicemembers could afford—could affect developers’ interest in using 

the LIHTC program. Furthermore, although HUD and USDA programs 

could help some eligible servicemembers rent existing units, the programs 

are not entitlements; the limited availability of this rental assistance may 

preclude servicemembers from using the programs. Also, if more 

servicemembers applied for these programs, eligible lower-income civilians 

might face longer times on waiting lists.

Servicemembers May Not 

Need Programs because 

BAH Rates Cover Median 

Costs and Are Adjusted for 

Changing Rents

According to DOD officials, servicemembers would be unlikely to need 

federal rental housing programs to obtain affordable housing near growing 

installations because BAH rates cover local housing costs and would adjust 

for any increases in market rents that resulted from personnel gains. As of 

2005, BAH rates fully cover the median local cost of housing at each 

installation. Officials noted that DOD’s recent initiative to reduce 

servicemembers’ out-of-pocket housing costs had resulted in substantial 

increases in BAH rates nationwide, including at the four selected 

installations we reviewed (Forts Benning, Bliss, Drum, and Riley). In 

addition, the officials said that, if increased demand for housing near a 

growing installation caused upward pressure on housing costs, DOD would 

adjust BAH rates upward as part of the annual rate-setting process, 

allowing servicemembers to obtain market-rate housing without additional 

federal assistance. However, if vacant units were not available in the 

communities immediately surrounding a growing installation, DOD 

officials acknowledged that some servicemembers might have to seek 

housing in outlying communities until the private market responded with 

new construction closer to the installation. 
Page 21 GAO-06-784 Rental Assistance for the Military

Furthermore, the National Defense Authorization Act for Fiscal Year 2006 

authorized the Secretary of Defense to prescribe temporary increases in 

BAH rates in disaster areas or areas that contain one or more installations 

that are experiencing a sudden increase in the number of servicemembers 

assigned to the installation.22 Specifically, a temporary increase in BAH 

rates would be based on the amount by which area housing costs increased 

because of the disaster or influx of service members and would apply until 

new rates for the next calendar year took effect. According to DOD 

officials, no installations had requested an increase in BAH rates because 

of installation growth, and the Secretary had not used this authority as of 

June 2006. If an installation requests a temporary increase in BAH rates 

because of installation growth, the officials said that DOD would review 

local market conditions to determine whether an increase was warranted.

Ability of the LIHTC 

Program to Produce Needed 

Housing Could Be Affected 

Not Only by 

Servicemembers’ Eligibility, 

but Also by the State 

Allocation Process and 

Market Conditions 

To varying degrees, officials in the four communities (near Forts Benning, 

Bliss, Drum, and Riley) that we examined described a need to build more 

private housing for incoming servicemembers. Some officials indicated 

that, under certain conditions, the LIHTC program could help address their 

anticipated housing needs.

According to officials at the selected installations, expected gains in 

military personnel ranged from about 4,500 at Fort Benning to about 19,500 

at Fort Bliss (see table 3). The rural installations—Fort Drum and Fort 

Riley—expected more substantial growth relative to their existing supply 

of housing than did the urban installations. The communities generally did 

not yet have precise data on the expected number of servicemembers that 

would be most likely to seek private housing (servicemembers with 

families and those in higher pay grades who do not have dependents) or 

required to live in barracks (servicemembers in junior pay grades who do 

not have dependents). However, community officials in the Fort Riley area 

estimated that at least 9,000 more housing units would be needed, 

considering both the estimated number of incoming military personnel and 

the expected growth in the civilian employment at the installation. 

Similarly, community officials near Fort Drum estimated the need for 

approximately 2,000 additional units. Community officials in the Fort 

Benning and Fort Bliss areas had not developed such estimates, but they 

22Pub. L. No. 109-163 (37 U.S.C. § 403(b)).
Page 22 GAO-06-784 Rental Assistance for the Military

also anticipated that some new construction would be necessary to 

accommodate installation growth as well as other population increases. 

Table 3: Expected Growth in Military Personnel at Four Selected Installations

Sources: GAO, U.S. Census Bureau, and selected installations. 

Note: The installations are gaining servicemembers as a result of the BRAC process, the restationing 

of servicemembers from overseas, the Army’s initiative to change its force structure, or a combination 

of these initiatives. We determined whether an installation was rural or urban using the Rural-Urban 

Commuting Area codes developed by USDA’s Economic Research Service and the Office of Rural 

Health Policy, Department of Health and Human Services. We compiled the most recent Census 

estimates of the total number of private housing units in the primary counties within each installation’s 

Army-defined market area. We considered a county to be primary if most of its land area fell within the 

market area. We present the installations’ growth as a percentage of the primary counties’ housing 

units only to illustrate the relative magnitude of each installation’s growth. This table is not intended to 

suggest the number of servicemembers that would seek private housing, the number of existing units 

that might be available for rent or purchase, or the number of existing units that the Army considers 

suitable for servicemembers. 

a

The figures for Fort Benning exclude its military student population because these personnel 

generally live on base and, thus, would not seek private housing.

Officials in some of these communities indicated that, under certain 

conditions, the LIHTC program could help address their anticipated 

housing needs. In particular, officials in the rural communities surrounding 

Fort Drum and Fort Riley said that the LIHTC program could help them 

build more affordable housing in response to installation growth, but only 

if more servicemembers would qualify to live in tax-credit units (see

Installation Primary counties

Urban or 

rural

Pregrowth 

military 

personnel

Expected growth in 

military personnel

Area’s private 

housing units, 

2002

Growth as a 

percentage of 

private units

Fort Benning, 

Georgia

Muskogee and 

Chattahoochee

Urban 15,000a 4,500a 81,500 6%

Fort Bliss, Texas El Paso Urban 9,500 19,500 232,000 8

Fort Drum, New 

York

Jefferson Rural 11,000 6,000 54,500 11

Fort Riley, Kansas Geary and Riley Rural 11,500 6,500 - 7,500 36,000 18 - 21

How the LIHTC Program Works

The LIHTC program, which IRS and the 

states administer jointly, supports the 

development and rehabilitation of rental 

housing for low-income households. 

Annually, states are apportioned federal tax 

credits on a per capita basis. On the basis

of priorities established each year, states

allocate the credits to the owners of 

qualified projects. Investors provide funds to 

complete the projects and, in exchange, 

may take the credits annually for 10 years

to offset federal income tax.

To qualify for credits, a project owner must 

agree to set aside at least (1) 20 percent of 

units for households with incomes at or 

below 50 percent of AMI or (2) 40 percent 

of the units for households at or below 60 

percent of AMI.
Page 23 GAO-06-784 Rental Assistance for the Military

sidebar).23 Assuming that the primary components of military pay were the 

only sources of household income, modest percentages of servicemembers 

at Fort Drum and Fort Riley in December 2005 might have qualified for 

tax-credit units using the 60 percent of AMI limit even under the program’s 

existing income definition, but much larger percentages (about 37 percent 

and 26 percent, respectively) would have been eligible if BAH were 

excluded from income determinations (see fig. 5). In contrast, almost none 

of the servicemembers at Fort Benning and Fort Bliss would have been 

eligible under the existing income definition, and modest percentages 

(about 14 percent and 10 percent, respectively) would have been eligible if 

BAH were excluded from income determinations. The variation in 

servicemembers’ eligibility across installations reflected differences in the 

percentages of servicemembers in the lowest pay grades.

Figure 5: Servicemembers Potentially Eligible for Tax-Credit Units at the 60 Percent of AMI limit, as of December 2005

23Although the community officials that we contacted focused on a potential role for the 

LIHTC program, tax-exempt multifamily housing bonds also could be used to help finance 

new rental housing. Like the LIHTC program, the tax-exempt bond program requires 

properties to set aside a minimum percentage of units for households at the 50 percent or 60 

percent of AMI limit, but it generally does not require them to restrict rents. However, 

properties financed with bonds may have to restrict units’ rents if they also participate in 

other federal rental housing programs with such requirements, including the LIHTC 

program.

Fort Riley,

Kansas

Fort Drum,

New York

Fort Bliss,

Texas

Fort Benning,

Georgia

3,756

7,048

8,391

6,726

36

232

6

19

958

2,588

795

936

1.0

3.3

0.1

0.3

25.5

36.7

9.5

13.9

Servicemembers

receiving

BAH Number Percent

Eligible servicemembers

Location

Eligible with BAH

Eligible without BAH

Sources: GAO and DOD.
Page 24 GAO-06-784 Rental Assistance for the Military

Note: This figure reflects the eligibility of servicemembers at selected installations as of December 

2005, assuming that the primary components of military pay were the only sources of household 

income. Our analysis does not take into account anticipated gains in the number of servicemembers at 

these installations.

Although these data, which pertain to personnel already located at these 

installations as of December 2005, do not indicate how many incoming 

personnel might be eligible to live in tax-credit units, they suggest that 

substantial percentages of those at the rural installations might become 

eligible if BAH were excluded from income determinations. In light of that 

possibility, community officials near Fort Drum and Fort Riley stated that 

excluding BAH could create opportunities to use the LIHTC program. 

Specifically:

• Community officials near Fort Drum indicated that some developers 

were interested in building new rental housing but faced obstacles in 

financing projects because of an estimated gap between current market 

rents, which incoming junior enlisted personnel likely could afford, and 

the higher rents that developers would need to charge to make new 

apartments financially feasible without government subsidies. The 

officials had been working with developers to seek financing assistance 

through state programs, including New York’s low-income housing tax 

credit program, which serves households with incomes up to 90 percent 

of AMI. However, because the state programs are relatively small, the 

officials said that increasing servicemembers’ eligibility for the larger 

federal LIHTC program would provide more financing options for 

developers.

• Community officials near Fort Riley noted that servicemembers make 

up a substantial portion of the current and expected future rental 

market in the area, particularly in the community of Junction City just 

outside of the installation. They said that while some developers of 

tax-credit projects have expressed interest in building more units in the 

area, they would only do so if the pool of potential tenants included 

more incoming servicemembers, because the demand for additional 

tax-credit units among civilian families is limited.

However, even if BAH were excluded from income when determining 

eligibility and if developers proposed building tax-credit units, 

LIHTC-funded development might be limited near growing installations 

because the state agencies that award available tax credits have a variety of
Page 25 GAO-06-784 Rental Assistance for the Military

priorities.24 By law, each state must prepare an annual plan that identifies 

its criteria for distributing its allocation of credits among proposed 

developments. A state would have to weigh how a proposed property 

would address the housing needs near growing installations against the 

state’s priorities and selection criteria. States must give preference to 

projects serving the lowest-income tenants and projects that would serve 

qualified tenants for the longest periods of time. The states’ selection 

criteria also must include other considerations, such as tenant populations 

with special housing needs. For example, the priority housing needs in 

Kansas’s plan for allocating tax credits in 2006 include projects in 

communities with populations of fewer than 5,000; preservation of housing 

with Section 8 or Section 521 project-based rental assistance; projects for 

special-needs populations, such as the homeless or people with disabilities; 

and projects whose units would offer below-market-rate rents. Projects 

addressing these priorities would receive extra points in the scoring 

process used to evaluate proposals. 

Furthermore, officials in the four communities described market factors 

that could influence whether developers would try to use the LIHTC 

program to build housing near growing installations.25 In general, 

developers would have limited incentive to compete for tax credits if 

conditions for building market-rate housing were favorable, such as in 

areas having a higher-income population. Generally, market-rate housing 

allows developers to charge whatever rents the market will bear, without 

other restrictions. In contrast, applicants for tax-credit financing must 

agree to limit the rents charged for tax-credit units for at least 30 years and 

must comply with other federal requirements for 15 years or risk losing the 

right for investors to claim the tax credits. Thus, developers might be less 

likely to propose new tax-credit units near a growing installation that 

expected to receive more senior servicemembers with relatively high 

24If a project receives 50 percent or more of its financing through tax-exempt multifamily 

housing bonds, it does not have to compete to receive credits through the LIHTC program, 

and those credits do not count against the state’s annual tax-credit allocation. Such projects 

receive fewer credits than those that compete for an allocation. However, states can issue 

only a limited volume of tax-exempt bonds, so projects would still have to compete for bond 

financing.

25We did not evaluate how these factors might affect the prospects for using the LIHTC 

program in the four communities, nor could we generalize about their applicability in other 

communities. Rather, this information is intended to illustrate factors that might make it 

more or less likely that developers would use the LIHTC program to address housing needs 

near growing installations.
Page 26 GAO-06-784 Rental Assistance for the Military

incomes than near one that expected more junior members with relatively 

low incomes. For example:

• Aside from military students who would live on base, most of the 

incoming military personnel at Fort Benning are associated with the 

planned realignment of a training school with primarily senior-ranking 

personnel. Community officials said that because these personnel likely 

could afford to pay market rates for housing, they did not expect 

developers to focus on providing new housing through the LIHTC 

program. 

• In contrast, on the basis of preliminary estimates from Fort Riley 

officials, roughly 45 percent of the servicemembers that would 

eventually be stationed there might be married members in pay grades 

E-1 through E-6. As of early 2006, the communities near Fort Riley had 

substantial market-rate development under way or in the planning 

stages. However, community officials anticipated that enough additional 

low-cost housing would be needed for servicemembers in these lowest 

pay grades to justify building tax-credit units for them (assuming they 

were to become eligible). 

In addition, developers might be more disposed to seek LIHTC financing in 

areas where the cost to build new housing was high relative to the incomes 

of junior enlisted members. For example:

• Whereas officials in the Fort Benning area expected that developers 

could build new market-rate housing within the price range that 

incoming servicemembers could afford, officials in the rural Fort Drum 

and Fort Riley areas stated that increasing construction, labor, and 

infrastructure costs could make new market-rate units too expensive for 

junior enlisted members or could make it difficult to secure financing 

for market-rate units.26 For example, the cost of bringing materials and, 

perhaps, workers into a rural area can contribute to relatively high 

development costs.

• Near Fort Bliss, El Paso city officials said that the LIHTC program might 

be an attractive financing alternative for developers if they could not 

otherwise build housing that servicemembers with the lowest incomes 

26We did not collect data on development costs in these communities or evaluate the 

feasibility of market-rate development.
Page 27 GAO-06-784 Rental Assistance for the Military

could afford. However, the officials did not yet know whether 

developers might need subsidies. They planned to study the issue by 

considering the expected incomes of servicemembers who would be 

arriving at Fort Bliss, the supply and price of existing housing, and the 

development costs and rents that would be charged for new market-rate 

housing. 

Waiting Time and Scarcity of 

Larger Units May Preclude 

Servicemembers from 

Renting Existing Units 

through HUD and USDA 

Programs

Even if more servicemembers were to become eligible for HUD and USDA 

rental housing assistance programs, waiting lists for units and the limited 

availability of large units might limit servicemembers’ participation in these 

programs, according to officials from HUD, USDA, and the four selected 

communities. 

Rather than financing new rental housing near growing installations, HUD’s 

Housing Choice Voucher, public housing, and project-based Section 8 

programs and USDA’s Section 515 and Section 521 programs primarily 

would help servicemembers rent existing units if they obtained the 

programs’ assistance, typically by making up the difference between their 

required contribution (generally 30 percent of adjusted monthly income) 

and a unit’s total rent.27 However, these programs are not entitlements, and 

many of the HUD, USDA, and community officials said that the limited 

number of units or limited supply of rental assistance may deter eligible 

servicemembers from applying for these programs, especially in areas with 

long lists of applicants already awaiting assistance. If they did join the 

programs’ waiting lists, servicemembers might find other private, 

military-owned, or privatized housing; relocate to a different installation; or 

become ineligible for the program because of a promotion before they rose 

to the top of a list. In all four of the communities we reviewed, the Housing 

Choice Voucher and public housing programs had waiting lists, with times 

ranging from a few months to 2 years, according to officials from HUD field

27The Section 515 Rural Rental Housing Loans program also finances new rental housing, 

but the loans are available only in USDA-eligible rural areas (generally towns no larger than 

20,000 people), and USDA annually designates a limited number of these communities to 

receive loans for new construction. Because the program now finances relatively few new 

units, we focused on the availability of existing Section 515 units.
Page 28 GAO-06-784 Rental Assistance for the Military

offices and the housing authorities that maintain the lists.28 For example, in 

Columbus, Georgia, near Fort Benning, the waiting list for vouchers was 

long enough that it was closed as of March 2006 and was not expected to 

open to new applicants until 2008. 

In addition, servicemembers with large families may face obstacles to using 

rental assistance programs because of the limited availability of units with 

three or more bedrooms, according to some HUD, USDA, housing 

authority, and installation officials.29 In the four communities, properties 

with project-based Section 8 assistance and public housing developments 

offered relatively few units with three or more bedrooms, thereby limiting 

the options for families of five or more persons. For instance, in the Fort 

Drum area, of 690 project-based Section 8 and public housing units 

intended for families, 172 had three bedrooms and 43 had four bedrooms; 

the remaining 475 had fewer than three bedrooms. Similarly, although 

voucher recipients can seek housing in the broader private rental market, 

some of the HUD field office officials noted that larger families could have 

a hard time finding a sufficiently sized apartment or house that would meet 

the program’s quality and cost standards.

If servicemembers did join the programs’ waiting lists, HUD headquarters 

and field office officials noted that housing authorities could adopt 

preferences that would reduce servicemembers’ wait for vouchers or 

public housing, but some officials said that such a step could be 

controversial. The housing authorities that administer vouchers and public 

housing developments may establish local preferences for selecting 

families from waiting lists, on the basis of local housing needs and 

priorities. However, HUD and housing authority officials said that such 

preferences—for example, for victims of domestic violence or a single 

28HUD and USDA offices do not maintain information on which properties in the 

project-based Section 8, Section 515, or Section 521 programs have waiting lists or the 

length of wait times. However, HUD field office officials generally described the four 

communities’ project-based Section 8 properties for families as fully occupied or nearly so. 

USDA officials reported that some Section 515 properties near rural Fort Drum and Fort 

Riley had vacancies, while others were fully occupied and had waiting lists.

29Installations can accommodate some servicemembers with large families who had 

difficulty finding suitable and affordable housing through a federal rental housing program 

or on their own. For example, DOD and installation officials described instances where 

installations had modified military-owned or privatized family housing units (e.g., merging 

two units). However, such units would not necessarily be readily available because of the 

generally limited amount of military-owned and privatized housing.
Page 29 GAO-06-784 Rental Assistance for the Military

homeless person—have sometimes met opposition from those who would 

face longer waits because they did not qualify for these preferences. 

Similarly, some HUD officials said that increasing servicemembers’ 

eligibility for the programs or giving them preference on waiting lists could 

create tensions with lower-income civilians who might have to face even 

longer waiting periods for rental assistance as a result. On the basis of the 

2006 pay rates for the primary elements of military compensation, 

servicemembers in all pay grades would have substantially more income 

than most existing Housing Choice Voucher recipients, even without their 

BAH payments (see fig. 6).30 In light of that difference in incomes, some of 

the officials also cited potential concerns about balancing any advantages 

for servicemembers with the programs’ current emphasis on targeting 

assistance to households with extremely low incomes.31

30We used 2003 and 2004 data from HUD’s Public and Indian Housing Information Center to 

estimate the median income of voucher recipients at the beginning of 2006. We assessed 

these data and concluded that they were sufficiently reliable for our purposes.

31Each year, at least 75 percent of new Housing Choice Voucher recipients and at least 40 

percent of new public housing and project-based Section 8 residents must have extremely 

low incomes.
Page 30 GAO-06-784 Rental Assistance for the Military

Figure 6: Income Ranges of Housing Choice Voucher Recipients and 

Servicemembers in Selected Pay Grades, 2006

Conclusions As some military installations gain servicemembers, nearby communities 

face opportunities for growth as well as potential challenges in providing 

an adequate supply of housing that incoming servicemembers can afford. 

Many of these incoming personnel may not have problems finding housing 

they can afford—for example, junior enlisted members without dependents 

generally live in barracks; DOD has the ability to raise BAH rates for other 

servicemembers to reflect any increases in housing costs near the growing 

installations; and many servicemembers may have additional resources, 

such as spousal income, that they can put toward housing costs. Where 

communities lack enough housing for incoming personnel or where rents 

are expensive for married junior personnel, federal rental housing 

programs might help provide affordable housing for servicemembers 

through the production of additional housing or through rental assistance 

for existing housing. By excluding BAH from servicemembers’ incomes 

when determining eligibility, many of the lowest-ranking servicemembers 

could qualify to apply for these programs. 

Pay grade

E-1

E-2

E-3

E-4

E-5

E-6

E-7

E-8

E-9

Privates, Airmen,

Seamen

Corporals, Petty 

Officers, Sergeants

Sergeants First Class, 

Chief Petty Officers, 

Master Sergeants,

First Sergeants, 

Sergeant Majors

Typical rank

Pay range (dollars in thousands)

0 25 50 75 100

Sources: GAO, DOD, and HUD.

25th - 75th percentile range

Estimated median annual income of

voucher recipients in 2006 ($9,557)

Pay range with average BAH

Pay range without average BAH
Page 31 GAO-06-784 Rental Assistance for the Military

However, the effects of such a change are uncertain and could involve 

trade-offs that warrant attention. For example, the LIHTC program (or, 

similarly, tax-exempt multifamily housing bonds) could help increase the 

supply of affordable rental housing for incoming servicemembers, if more 

of the members were eligible to live in tax-credit units. However, even if 

more servicemembers were eligible, the extent to which the LIHTC 

program would play a role in increasing the supply of affordable housing 

near growing installations would depend on local housing market 

conditions, the income distribution of incoming servicemembers, and the 

decisions of state agencies regarding whether to allocate tax credits to 

projects near growing installations or to projects that might address other 

state housing priorities. Furthermore, the rental assistance programs are 

not entitlements and already do not assist all eligible households. While 

some servicemembers might be deterred by the prospect of a lengthy wait 

from applying for HUD and USDA rental assistance for existing units, those 

who did apply would expand the pool of those waiting for a limited supply 

of available assistance. Thus, making more servicemembers eligible by 

excluding BAH from income determinations could cause these programs to 

serve more servicemembers at the expense of eligible civilians. 

Matter for 

Congressional 

Consideration

If the primary intent of excluding BAH from income determinations for 

federal rental housing programs is to help increase the supply of rental 

housing that servicemembers with the lowest incomes could afford, 

Congress should consider first applying such a change only to programs 

intended to stimulate production of such housing, such as LIHTC and 

tax-exempt multifamily housing bonds. 

Agency Comments and 

Our Evaluation 

We provided a draft of this report to DOD, HUD, IRS, Treasury, and USDA 

for their review and comment. Treasury and USDA did not comment on the 

draft report. DOD, HUD, and IRS provided technical comments, which we 

incorporated where appropriate. DOD also provided comments in a letter 

from the Acting Deputy Under Secretary for Military Personnel Policy (see 

app. II).

DOD commented that BAH does an excellent job of achieving the objective 

of providing servicemembers with the same quality and quantity of housing 

that their civilian counterparts can afford. However, DOD also noted that 

servicemembers may have difficulty finding adequate housing if there are 

substantial changes in the supply of or demand for housing in a local area, 
Page 32 GAO-06-784 Rental Assistance for the Military

at least until the private market has had time to adjust to the changing 

conditions. DOD also observed that servicemembers with large families, 

who seek larger housing than an average size family, may have difficulty 

finding adequate housing using their BAH payments alone and may apply 

for federal rental housing programs. However, DOD also stated that 

servicemembers should be eligible for federal housing subsidies under the 

same terms as their civilian counterparts. Furthermore, DOD commented 

that excluding BAH from income determinations might transfer existing 

scarce resources from low-income civilians to the military and generate 

ill-will among civilians toward the military. Finally, DOD stated that, while 

our draft report showed that excluding BAH from income determinations 

might not have the desired effect of increasing the supply of rental housing 

for servicemembers, there might be other ways in which the government 

could assist the private market in responding to housing shortgages. Our 

draft report discussed the particular difficulties of large families—even 

those receiving rental assistance—in finding suitable housing. The draft 

report also addressed the potential role of existing programs, particularly 

the LIHTC program, in stimulating production of affordable housing near 

growing installations. However, examining other possible federal strategies 

for increasing the supply of private housing was beyond the scope of this 

study. 

We are sending copies of this report to other interested congressional 

committees; the Secretaries of the Departments of Agriculture, Defense, 

Housing and Urban Development, and the Treasury; and the Commissioner 

of Internal Revenue. We will make copies available to others upon request. 

This report will also be available at no charge on GAO’s Web site at 

http://www.gao.gov.

Please call me at (202) 512-8678 if you or your staff have any questions 

about this report. Contact points for our Offices of Congressional Relations 

and Public Affairs may be found on the last page of this report. See 

appendix III for key contributors to this report.

David G. Wood

Director, Financial Markets

 and Community Investment
Page 33 GAO-06-784 Rental Assistance for the Military

Appendix I

Objectives, Scope, and Methodology AAppenednxidexiIs

Objectives Our objectives were to determine (1) how excluding the Basic Allowance 

for Housing (BAH) from income determinations would have affected the 

eligibility of servicemembers receiving BAH as of December 2005 and (2) 

programmatic and market factors that could affect eligible 

servicemembers’ participation in the programs in selected communities 

gaining military personnel.

Scope and 

Methodology

The federal rental housing programs in our scope include the Department 

of Housing and Urban Development’s (HUD) public housing, Housing 

Choice Voucher, and project-based Section 8 programs; the Department of 

Agriculture’s (USDA) Section 515 Rural Rental Housing Loans and Section 

521 Rural Rental Assistance programs; and the Low-Income Housing Tax 

Credit (LIHTC) and tax-exempt multifamily housing bond programs, which 

are jointly administered by the Internal Revenue Service (IRS) of the 

Department of the Treasury (Treasury) and the states.1

To determine how excluding BAH would have affected the eligibility of 

active-duty servicemember households receiving BAH as of December 

2005, we compared the incomes of servicemembers who received BAH in 

December 2005 with the federal rental housing programs’ income limits in 

effect at that time.2

 We obtained personnel and pay data from the 

Department of Defense’s (DOD) Active Duty Personnel Master and Active 

Duty Pay files for December 2005.3

 We analyzed data on 702,975 active-duty 

servicemembers who received BAH payments that month. We calculated 

servicemembers’ annual incomes on the basis of their December 2005 

payments for basic pay; BAH; Basic Allowance for Subsistence; and, where 

1

We excluded HUD’s multifamily mortgage insurance programs from our scope because 

they do not impose income eligibility requirements on tenants (although insured properties 

may also participate in other federal programs that do impose such requirements). We also 

excluded HUD’s Section 202 Supportive Housing for the Elderly and Section 811 Supportive 

Housing for the Disabled programs because they generally would not be relevant to activeduty servicemembers. We also excluded USDA’s small Section 538 program, which 

guarantees mortgages on multifamily properties in rural areas.

2

HUD publishes the 50 percent of area median income limits, which vary by location and 

family size. Consistent with IRS guidance for the LIHTC and tax-exempt multifamily housing 

bond programs, we also used these published limits to calculate the 60 percent of area 

median income limits. We then used zip codes and family sizes as of December 2005 to 

determine the applicable income limit for each servicemember.

3

DOD’s Defense Manpower Data Center provided us with the personnel and pay files.
Appendix I

Objectives, Scope, and Methodology

Page 34 GAO-06-784 Rental Assistance for the Military

applicable, a cost-of-living adjustment for servicemembers in certain highcost areas. We assumed that these elements of military pay were 

servicemembers’ sole sources of household income because data on other 

income sources, such as spousal income, were unavailable.4

 However, we 

analyzed how other sources of income might have reduced 

servicemembers’ eligibility by calculating the median additional annual 

income needed before married servicemembers’ families would have 

exceeded the income eligibility limit.5

To assess the reliability of the data used in our analysis, we interviewed 

DOD officials who were familiar with the data, reviewed relevant 

documentation, and tested the data for missing and apparently erroneous 

values. DOD provided data on 708,548 active-duty members of the 

Departments of the Army, Navy and Air Force and the Marine Corps. On the 

basis of our tests of these data, we excluded 5,573 (about 0.8 percent) 

records because we could not match the servicemembers’ zip codes to the 

geographic areas for which income limits were defined, because data on 

family size were missing, or because anomalies in the monthly pay data 

prevented us from calculating an annual income amount.6

 As a result, our 

servicemember population was 702,975 for this analysis. We concluded that 

these data were sufficiently reliable for our purposes. Nonetheless, our 

analysis was limited because it provided a snapshot of servicemembers’ 

potential eligibility to apply for the programs on the basis of their incomes 

in December 2005. We could not predict the effects of a future change in 

income determinations, because potential changes in servicemembers’ 

incomes or duty locations and annual adjustments to programs’ income 

limits would also affect eligibility. 

To determine the programmatic and market factors that could affect 

eligible servicemembers’ participation in the programs in selected 

4

In addition to the military pay elements that we considered, some servicemembers also 

received additional military allowances, special types of pay, or bonuses. However, we 

excluded such payments from our analysis because we lacked a reliable method to estimate 

the total amount of other military pay received in 2005 using data from a single month. 

5

With BAH included and excluded when determining income, we calculated the difference 

between servicemembers’ annual incomes and both the 50 percent and 60 percent of area 

median income limits for all servicemembers. 

6

A correction to an overpayment in a previous month can result in a negative value for an 

element of monthly pay. We excluded negative values because they would tend to 

understate servicemembers’ actual annual income and, in turn, overstate their eligibility to 

apply for federal rental housing programs. 
Appendix I

Objectives, Scope, and Methodology

Page 35 GAO-06-784 Rental Assistance for the Military

communities gaining military personnel, we interviewed and reviewed 

relevant documentation from military installation officials; rental housing 

program officials (including officials from HUD and USDA field offices, 

public housing authorities, and state housing finance agencies); and local 

government or community organization representatives in four 

communities near installations that will gain military personnel as a result 

of the 2005 base realignment and closure (BRAC) process or other military 

initiatives. We selected Fort Benning, Georgia; Fort Bliss, Texas; Fort 

Drum, New York; and Fort Riley, Kansas. We selected these installations on 

the basis of their expected net gains of military personnel and preliminary 

information indicating that the surrounding communities had initiated 

planning to address the housing needs of incoming servicemembers.7

 We 

also sought a balance between urban and rural locations. Our selection of 

four Army installations reflects that this service generally expected the 

largest personnel gains. We visited the Fort Riley, Kansas, area and 

contacted the other areas by telephone. We cannot generalize the 

information from these four installations to all installations that will gain 

military personnel. In addition to our local contacts, we also discussed 

factors that affect the use of federal rental housing programs with 

headquarters officials at the Army, DOD, HUD, USDA, IRS, and Treasury. 

We conducted our work in Washington, D.C.; Arlington, Virginia; and 

Junction City and Manhattan, Kansas, between November 2005 and July 

2006, in accordance with generally accepted government auditing 

standards. 

7

We used data on the expected net gains in military personnel from the following 2005 report 

that was approved by the President and Congress: Defense Base Closure and Realignment 

Commission, 2005 Defense Base Closure and Realignment Commission Report to the 

President (Washington, D.C.: Sept. 8, 2005). Forts Benning, Bliss, and Riley are among the 

installations gaining the most military personnel through the BRAC process. In addition, 

Fort Drum is gaining military personnel as a result of the Army’s initiative to change its force 

structure. 
Page 36 GAO-06-784 Rental Assistance for the Military

Appendix II

Office of the Under Secretary of Defense ApendxiI
Appendix II

Office of the Under Secretary of Defense

Page 37 GAO-06-784 Rental Assistance for the Military
Appendix II

Office of the Under Secretary of Defense

Page 38 GAO-06-784 Rental Assistance for the Military
Page 39 GAO-06-784 Rental Assistance for the Military

Appendix III

GAO Contact and Staff Acknowledgments ApendxiI

GAO Contact David G. Wood, (202) 512-8678 or WoodD@gao.gov

Staff 

Acknowledgments

In addition to the contact named above, Steve Westley, Assistant Director; 

Julianne Stephens Dieterich; Alison Martin; Bettye Massenburg; John 

McGrail; John Mingus; Marc Molino; David Pittman; and Barbara 

Roesmann made key contributions to this report.

(250264)
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