TruePITI Research · Military Finance Series
BAH 2026: What Military Housing Allowance Actually Buys
Published: 2026-09-08 | Data: DoD BAH rates (+4.2% 2026), VA loan math at 6.625% | Methodology: full amortization — see Methodology
Executive Summary
- 2026 BAH rose 4.2% nationally (DoD) — roughly $29.9 billion to about 1 million service members.
- An E-5 with dependents receives about $1,965/month nationally — enough to cover 80-100% of PITI on a $350,000 home at 6.625%.
- Location is the whole game: the same E-5 gets ~$1,730 in El Paso (covers 112% of a $240K home's PITI) but ~$3,440 in San Diego (covers just 61% of an $890K home).
- BAH is tax-free — at the 22% bracket, $1,965 of BAH is worth about $2,520 of taxable income.
Grade-by-Grade National Average (2026 estimates)
| Grade | With dependents | Without | % of $350K PITI covered* |
|---|---|---|---|
| E-1 | $1,554 | $1,136 | 63% |
| E-4 | $1,782 | $1,380 | 73% |
| E-5 | $1,965 | $1,558 | 80% |
| E-7 | $2,351 | $1,875 | 96% |
| O-1 | $2,210 | $1,745 | 90% |
| O-3 | $2,798 | $2,260 | 114% |
| O-5 | $3,320 | $2,765 | 135% |
*PITI on a $350,000 home, 10% down, 6.625%, 1.1% tax, $120/mo insurance. National-average BAH estimates — ZIP-specific rates vary.
15 Military Metros: What an E-5's BAH Covers
| Metro | Median home | Local BAH est. | PITI (10% down) | BAH covers |
|---|---|---|---|---|
| Fort Liberty (Fayetteville, NC) | $265,000 | $1,808 | $1,890 | 96% |
| Fort Cavazos (Killeen, TX) | $245,000 | $1,729 | $1,756 | 98% |
| Fort Bragg–Liberty area, NC | $265,000 | $1,808 | $1,890 | 96% |
| JBLM (Tacoma, WA) | $470,000 | $2,456 | $3,259 | 75% |
| San Diego, CA | $890,000 | $3,439 | $6,065 | 57% |
| Norfolk/Virginia Beach, VA | $350,000 | $2,063 | $2,458 | 84% |
| San Antonio, TX | $290,000 | $1,867 | $2,057 | 91% |
| Colorado Springs, CO | $430,000 | $2,260 | $2,992 | 76% |
| Honolulu, HI | $800,000 | $3,242 | $5,464 | 59% |
| Washington DC metro | $620,000 | $2,849 | $4,261 | 67% |
| Jacksonville, FL | $340,000 | $1,965 | $2,391 | 82% |
| Anchorage, AK | $370,000 | $2,122 | $2,591 | 82% |
| El Paso, TX | $240,000 | $1,670 | $1,723 | 97% |
| Savannah/Hinesville, GA | $300,000 | $1,867 | $2,124 | 88% |
Local BAH = national E-5 estimate × metro cost factor (approximation of ZIP-specific DoD rates). VA loan with 10% down; 0% down raises PITI ~5% and lowers coverage.
The Tax-Free Multiplier
BAH is excluded from federal income tax. At the 22% marginal bracket, $1,965/month of BAH equals about $2,520/month of taxable salary — a 28% effective uplift. Lenders also count BAH at 100% toward VA loan qualification, which is why an E-5's buying power often surprises civilian calculators: the same rank can qualify for a mortgage that would need $70,000+ of taxable income.
Limitations
- BAH figures are national-average estimates built from DoD 2026 rates; exact amounts require the ZIP-specific lookup.
- Metro factors are approximations — DoD's locality rates can differ.
- PITI assumes 10% down, 6.625%, 1.1% tax, $120/mo insurance — your figures vary.
- This is research and education, not financial or legal advice.
Sources: DoD BAH 2026 announcement (+4.2%) · Defense Travel Management Office · VA home loans