HAP aids military homeowners

Like thousands of American homeowners, John and Susan, a Coast Guard couple, were slammed financially by the real estate crisis.

They saw the value of the $150,000 house they bought in Texas in March 2006 plummet, starting in 2007. This month they will sell it for $125,000, well below the $138,000 they still owe on their mortgage. But unlike many homeowners, John and Susan can’t wait around until the housing market recovers. The Coast Guard ordered them to Texas four years ago; both must report next month to new east coast assignments.

John and Susan thought for a time that they would need to take out a separate settlement loan like other victims of the housing market collapse. But then they read a command advisory on how Congress last year expanded the decades’ old military Homeowners Assistance Program (HAP).

The government, it turns out, will pay that $13,000 difference for John and Susan, and already has paid a whole lot more to other military homeowners who found themselves in more distressed circumstances.

HAP has existed since 1960s to help military and federal civilian families who see the value of their homes fall following announcements that military bases were closing. But last year Congress expanded the program dramatically to help new categories of military homeowners. These include:

• Military personnel and civilian employees of the Department of Defense or the Coast Guard who have suffered wounds, injuries or illnesses during deployments since Sept. 11, 2001, leaving them at least 30 percent disabled and requiring location transfer to get medical care or to retire.

• Surviving spouses of service members killed in the line of duty, or in the performance of duties during a deployments on or after Sept. 11, 2001.

• Military personnel and civilian employees impacted by the 2005 BRAC (base realignment and closure) round because they bought their homes before May 13, 2005, and must sell on or before Sept. 30, 2012.

• Military members who bought homes before July 1, 2006, and have been, or will be, reassigned between Feb. 1, 2006 and Sept. 30, 2010.

John and Susan, who asked that their real names be withheld, fall into this later category. Next month, their HAP caseworker will be there at housing settlement with a check for $138,000 to pay off their mortgage. The new owner immediately will buy the house from the government for the agreed price of roughly $125,000. Thus John and Susan will escape their burdensome mortgage with a timely $13,000 assist from Uncle Sam.

Joe Sikes, director of housing for the Office of the Secretary of Defense, said so far 1360 military homeowners have been helped by the expanded HAP program. John and Susan’s predicament is modest compared to that of many military homeowners caught up in the real estate crisis. The average HAP benefit is $120,000, nearly double the original estimate.

Congress initially set aside $555 million for the program. The money and expanded authority to use it were part of the mammoth economic stimulus act enacted in February 2009. Lawmakers added another $300 million to HAP funding through the fiscal 2010 defense bill.