FAQs - Homeowners Assistance Program

Frequently Asked Questions

FAQs for Expanded HAP
FAQs for Conventional HAP

Expansion HAP by the American Recovery and Reinvestment Act of 2009

Expanded HAP

Q. What is "Expanded HAP"?

A. Congress created the Homeowners Assistance Program (HAP) in 1966 (see Section 3374, Title 42 United States Code) to financially compensate eligible military and civilian Federal employee homeowners when the real estate market was adversely affected directly related to the closure or reduction-in-scope of operations due to Base Realignment and Closure (BRAC). The American Recovery and Reinvestment Act of 2009 (ARRA), Public Law 111-5, expanded the HAP to provide assistance to:

Deployed wounded, injured, or ill members of the Armed Forces (30% or greater disability) and forward deployed wounded, injured, or ill Department of Defense (DoD) and Coast Guard civilian homeowners (including employees of non-appropriated fund instrumentalities) reassigned in furtherance of medical treatment or rehabilitation or due to medical retirement in connection with their disability;
Surviving spouses of the fallen
Base Realignment and Closure (BRAC) 2005 impacted homeowners relocating during the mortgage crisis; and
Service member homeowners undergoing Permanent Change of Station (PCS) moves during the mortgage crisis.

Q. How do I apply?

A. Visit the HAP web site: http://hap.usace.army.mil/ and download the application package. Once you have completed the application, mail it to:

U.S. Army Engineer District, Savannah
Corps of Engineers
Attn: CESAS-RE-HM
100 West Oglethorpe Avenue
Savannah, Georgia 31401-3604

Q. What is the last date Expanded HAP applications will be accepted from military service members applying under Permanent Change of Station (PCS) and the Base Realignment and Closure (BRAC) 2005 eligibility categories?

A. Per 32 CFR Part 239 Direct Final Rule dated July 5, 2012 in the Federal Register, Expanded HAP applications must be filed no later than September 30, 2012 for military service members applying under the PCS and BRAC 2005 eligibility categories. Applications postmarked or deposited after September 30, 2012 will not be accepted.

Q. Will the application packages be handled in a first come first served manner?

A. Applications will be processed as quickly as possible in the following order:

Wounded, Injured, and Ill. Within this category, applications will generally be processed in chronological order of the wound, injury, or illness.
Surviving Spouses. Within this category, applications will generally be processed in chronological order of the date of death of the member or employee.
BRAC 2005 Members and Civilian Employees. Within this category, applications will generally be processed in chronological order of the date of job elimination.
Permanently Reassigned Members of the Armed Forces. Within this category, applications will generally be processed beginning with the earliest report-not-later-than date of PCS orders.

Q. What should I do after I mail in my completed application?

A. Wait for your confirmation email. Within 3 business days of your application arriving in the Savannah District you will receive an email notification. Within 20 business days of receipt, you will receive another email addressing the status of your application.

Q. What rights do I have if I am not satisfied with decisions made regarding Expanded HAP?

A. You have the right to appeal any decision denying benefits or contesting the amount of benefits allowed. No particular format is required. Simply submit a written statement of your objections to the appropriate Corps district office. The appeal will be reviewed at the district level. If favorable action cannot be taken, your appeal will be submitted to higher headquarters. If a favorable decision cannot be made at this level, a final decision will be made by the Deputy Under Secretary of Defense (Installations and Environment).

ELIGIBILITY Q. Who is eligible for Expanded HAP assistance?

A. ARRA Expanded HAP applies to certain:

Wounded, Injured, or Ill service members and DoD (including Coast Guard) civilian employees (including employees of non-appropriated fund instrumentalities)
The surviving spouse of a member of the Armed Forces or of a civilian employee whose spouse dies as the result of a wound, injury, or illness incurred in the line of duty
Base Realignment and Closure 2005 impacted service members and civilians
Permanent Change of Station (PCS) service members

Q. Will the HAP continue into 2012?

For PCSing service members, PCS orders must be dated between February 1, 2006, and September 30, 2010.
For WII and SS, the HAP will continue indefinitely.
For BRAC 2005 impacted service members and civilian employees, HAP will continue through Sep 2012.

Q. What are the specific eligibility requirements for Wounded, Injured, or Ill?

A. For members of the Armed Forces – Those who receive a disability rating of 30% or more for an unfitting condition (using the Department of Veterans Affairs Schedule for Ratings Disabilities), or who are eligible for Service member's Group Life Insurance Traumatic Injury Protection Program, or whose treating physician (in a grade of at least captain in the Navy or Coast Guard or colonel in Army or Air Force) certifies that the member is likely, by a preponderance of the evidence, to receive a disability rating of 30% or more for an unfitting condition for wounds, injuries, or illness incurred in the line of duty while deployed, on or after September 11, 2001.

For Civilian Employees of DoD, including employees of Non-Appropriated Fund Instrumentalities (NAFI) or the United States Coast Guard who suffer a wound, injury, or illness (not due to own misconduct), on or after September 11, 2001, in the performance of duties while forward deployed in support of the Armed Forces, whose treating physician provides written documentation that the member, by a preponderance of the evidence, meets the criteria for a disability rating of 30% or more (this documentation will be certified by a physician in the grade of at least captain in the Navy or Coast Guard or colonel in Army or Air Force).

For both military and civilian applicants there must be a need to relocate from the primary residence in furtherance of medical treatment, rehabilitation, or due to medical retirement resulting from the wound, injury, or illness, and a need to market the primary residence for sale due to the wound, injury or illness. (For example, the need to be closer to a hospital or a family member caregiver or the need to find work more accommodating to the disability.)

Q. What are the specific eligibility requirements for a Surviving Spouse?

A. The surviving spouse of a Service member or of a civilian employee whose spouse dies as the result of a wound, injury, or illness incurred in the line of duty while deployed (or forward deployed for civilian employees) on or after September 11, 2001, and who relocate from the member's or civilian employee's primary residence within two years of the death of spouse.

Q. What are the specific eligibility requirements for Base Realignment and Closure (BRAC) 2005?

A. BRAC 2005 applies to members of the Armed Forces and civilian employees of the Department of Defense and the United States Coast Guard (not including temporary employees or contractors) and employees of non-appropriated fund instrumentalities who:

Were assigned to the BRAC impacted organization on the announcement date, 13 May 2005.
Relocate beyond the normal commuting distance from the primary residence (50 miles) because of a transfer, employment, or retirement from BRAC impacted organization, because position is relocated or eliminated.

BRAC impacted civilian employees may voluntarily retire if position is eliminated or relocated.
BRAC impacted service members must be under mandatory retirement orders to be eligible.

Sell their primary residence between July 1, 2006 and September 30, 2012.
new residence must be within 50 miles of the new duty station.
were the owner-occupant of their primary residence before May 13, 2005, the date of the BRAC 2005 announcement. (An owner-occupant is someone who has both purchased and resided in the residence on or before May 13, 2005.)
suffered a decline of at least a 10% in home value from the date of purchase to date of sale. (Market value of the home will be verified by the USACE.)

Q. What are the specific eligibility requirements for Permanent Change of Station (PCS)?

A. PCS refers to the assignment or transfer of a member to a different permanent duty station (PDS), to include relocation to place of involuntary retirement, under a competent authorization/order that does not specify the duty as temporary, provide for further assignment to a new PDS, or direct the military service member return to the old PDS.

To qualify, a service member must have:

owned home prior to July 1, 2006
have PCS orders dated between February 1, 2006 and September 30, 2010. (This date may be extended to September 30, 2012, at the discretion of the DUSD(I&E) based on availability of funds)
reassigned to a new duty station or home port outside a 50-mile radius of the member's former duty station or home port
sold their primary residence between July 1, 2006 and September 30, 2012
suffered a decline of at least a 10% in home value from the date of purchase to date of sale (market value of the home will be verified by the USACE).

Q. Would a civilian employee who chooses to PCS for a different job qualify for the program?

A. No. Simply moving for a different job would not meet the current qualifications of the Expanded HAP. As a federal civilian employee, you would only qualify for the Expanded HAP if you were assigned to a BRAC organization or installation and your position was moving or being eliminated.

Q. Are individuals assigned to an installation after the announced BRAC 2005 action eligible for Expanded HAP benefits if they purchased their homes after the closure/realignment announcement?

A. Applicant must have been the owner/occupant at the time of the BRAC 2005 announcement date of May 13, 2005. Contact the Corps district responsible for the area in which your home is located for further information. http://hap.usace.army.mil/Contact.html>

Q. Under BRAC 2005, is a service member or federal employee who is not attached to the installation eligible for HAP benefits?

A. No. Any service member or federal employee (including Non-Appropriated Fund employees) must be assigned to, or employed in connection with, an installation at the time of public announcement (May 13, 2005) of the closure action to be eligible.

Q. If a BRAC 2005 impacted civilian is RIF'd with no job offer; can he/she qualify for HAP benefits?

A. Yes, under certain circumstances. Contact the Corps district where the home is located for further information.

Q. Is there a cap on the benefits the Expanded HAP will pay per applicant?

A. The total benefit calculation is based upon the home purchase price. The benefits for applicants who purchased homes for more than $729,750 will be calculated using $729,750 as the purchase price

Q. If I retire, do I qualify for HAP benefits?

A. If you are a BRAC 2005 eligible applicant you qualify only if your position is moved or eliminated. Permanently Reassigned Members of the Armed Forces (PCS) who are reassigned or who otherwise relocate for the following reasons are NOT eligible for Expanded HAP benefits:

Members who voluntarily retire prior to reaching their mandatory retirement date
Members who are a new accession into the Armed Forces or who are otherwise entering active duty
Members who are voluntarily separated or discharged
Members whose separation or discharge is characterized as less than honorable
Members who request and receive voluntary release from active duty (REFRAD)
Members who are REFRAD for misconduct or poor performance

Q. What is the latest date military service members applying under Permanent Change of Station (PCS) and the Base Realignment and Closure (BRAC) 2005 eligibility categories may sale their home?

A. Per 32 CFR Part 239.6(b)(2)(iv) of the Final Rule dated November 16, 2010 in the Federal Register, military service members applying under the PCS and BRAC 2005 eligibility categories must have sold their primary residences between July 1, 2006 and September 30, 2012. Thus, September 30, 2012 is the latest date for PCS and BRAC 2005 applicants to sell their primary residences.

Q. What’s the definition of sold for Expanded HAP purposes?

A. The definition of “sold” includes closed sales transactions and binding sales contracts signed between the applicant and a buyer.

Q. If I’m not eligible for Expanded HAP, what other options may be available to help military service members impacted by the mortgage crisis?

A. The Department of Justice (DoJ) National Mortgage Settlement and/or the Federal Housing Finance Agency (FHFA) Short Sale Assistance for Military Homeowners with Fannie Mae and Freddie Mac Loans may be other options for you to consider. Please see the “Other Options” page for details.

BENEFITS Q. What is the basis for HAP benefits?

A. HAP benefits are based on the difference between the prior fair market value (PFMV) of the applicant's home (i.e., what you paid for the home) plus eligible improvements and the selling price. For Expanded HAP, the PFMV is the purchase price (verified by the HUD-1 settlement sheet from your purchase) plus improvements to the property (verified by receipts). However, for home purchase prices that exceed $729,750, the benefit calculation uses $729,750 as the purchase price. Improvements are identified in the Internal Revenue Publication #523 (http://www.irs.gov/publications/p523/ar02.html ) which outlines items considered home improvements and distinguishes improvements from repairs and maintenance.

Q. How long does the process take?

A. The normal processing time is between 60 and 90 days provided all required documents are submitted.

Q. If I have to sell my home at a loss, and I qualify for the Expanded HAP program, will I be able to recoup 100 percent of my loss?

A. No, but it can offset your losses. Each individual's situation is unique, so contact the Corps District responsible for the area in which your home is located for assistance. http://hap.usace.army.mil/Contact.html

Q. Will my Expanded HAP benefits be subject to Federal taxes ?

A. No. President Obama signed HR 3548, Unemployment Compensation Extension Act of 2009 (Public Law 111-92) which exempts Expanded HAP benefit payments from Federal taxes. However, some states may impose a tax on HAP benefits.

Q. If I am foreclosed upon, what will the government pay or not pay?

A. The government will pay all legally enforceable liabilities directly associated with the foreclosed mortgage (e.g., a deficiency judgment); but will not make up past payments. The Government will not pay encumbrances of a personal nature or junior mortgages acquired after acquiring the property unless the junior mortgage was obtained at the same time as the original mortgage or used to improve the property. If you deed the property back to the mortgage company in lieu of foreclosure, your application will be processed as a private sale.

Q. Who pays the closing costs under the Expanded HAP?

A. HAP covers closing costs that are customary for the seller to pay for the buyer in the area where the property is located. Sellers’ closing costs typically include: loan payoff fees; the real estate commission; title insurance; all or part of transfer taxes and escrow fees (if any); and attorney's fees where applicable.

For instance, in a VA or FHA loan, it is typical for the seller to pay the loan origination fee, appraisal fee, credit report and flood certification fees. HAP can reimburse up to 1% of the loan for the loan origination fee, the cost of the appraisal, credit report, and flood certification fees.

HAP may reimburse the seller for limited contributions made to the buyer's portion of closing costs. However, HAP can only reimburse for customary/normal closing costs that the applicant has “paid out of pocket” at the closing. The complete definition of closing costs can be found at 32 CFR 239.4(b).

Q. In a private sale, can I use a realtor to sell my home?

A. Yes. Using a realtor may increase your chances of finding a buyer. The Expanded HAP will pay all normal sellers' closing costs which typically include: loan payoff fees; the real estate commission; title insurance; all or part of transfer taxes and escrow fees, if there are any; attorney's fees where applicable; and other fees set by local custom. HAP will reimburse the seller for limited contributions made to the buyer's portion of closing costs.

What’s a short sale?

A. A short sale is when you sell your home for less than the balance remaining on your mortgage. Your mortgage company must agree to a short sale. For Expanded HAP purposes, short sales are treated as private sales.

Q. A real estate agent expects a commission. Will the Government pay commissions when the Government purchases an applicant's home?

A. No. Applicants should ensure that the listing agreement for their property contains the following statement: "In the event the herein listed property is sold to the United States of America, or an agency thereof, the listing broker will not be entitled to any commission or other consideration as a result of such sale." If the listing agreement does not contain the above statement and any commission is due, it is the applicant's responsibility to pay the commission. While the commission payment is the responsibility of the applicant, the Government will make the commission payment for the applicant when the home is sold by the Government to the applicant's buyer contingent upon both the Government acquisition and Government sale contract transactions being completed and recorded. Commissions will be paid to the broker listing the property. The allocation of dollars to real estate agents will be the responsibility of the listing broker.

Q. Under what circumstances will the Government pay commissions?

A. If you have a buyer for the home and your mortgage exceeds the property's current fair market value (i.e., upside down). The Government will make the commission payment for you when the home is sold by the Government to your buyer -- contingent upon both the Government acquisition and Government sale contract transactions being completed and recorded. Commissions are paid to the broker listing the property. The allocation of dollars to real estate agents will be the responsibility of the listing broker.

Q. Will I have to bring any money to closing?

A. An applicant may have to bring money to closing to cover mortgage interest and property taxes through the date of closing, homeowners association dues and/or transfer fees (unless required by local law), plus any mortgage principal not covered by HAP (only applies to loans that have been refinanced or equity loans or lines of credit taken out after purchase that cannot be traced back with receipts to home improvements). Note – Typically, interest is paid in arrears. Please check with your lender or settlement agent for items specific to you.

Q. Will I receive a benefit or reimbursement for closing costs if I have a short sale?

A. The only HAP benefit available in a short sale relates to debts held against the applicant from a lender through a promissory note as a result of the short sale. The applicant will only be reimbursed for closing costs that the applicant paid out of pocket that are customary for the region where the home is located. The complete definition of closing costs can be found at 32 CFR 239.4(b).

Q. At what point should I market my home?

A. As soon as you know you will be relocating. Two eligibility requirements for the program are

the applicant must have made a reasonable effort to sell the home, and
relocated beyond a reasonable commuting distance.

However, in some instances, applicants may be eligible without relocating under BRAC 2005 provided they lost their jobs due to a base closure or realignment and demonstrate a financial hardship. Contact the Corps district where the home is located for more information.

Q. What constitutes a reasonable effort to sell my home?

A. Your primary residence must be listed, actively marketed, and available for purchase for a minimum of 120 days. With regard to marketing, you must demonstrate that the asking price was within the current market value of the home as determined by the Corps automated value model (AVM) for no less than 30 days. It is your responsibility to explain marketing efforts by detailing how the asking price was gradually reduced until it reached the true current fair market value (i.e., maintaining a log containing date and asking price recorded over period of time indicating number of visits by prospective buyers and offers to purchase). If you are unable to sell the primary residence, the Corps will determine whether efforts to sell were reasonable.

Q. Will local appraisers have input into appraised values?

A. Home marketing estimates for Expanded HAP are prepared by an independent contract Automated Valuation Model company. Local appraisers may have input if you choose to appeal the decision for eligibility and wishes to purchase an appraisal yourself.

Q. If I rent my house before I sell it, will it impact my HAP benefit?

A. No. Rental income is not deducted from benefit payments.

Q. Is there any information I should include in a lease regarding the Expanded HAP?

A. Make certain the lease agreement contains the following clause: "If the leased premises are approved for purchase by the United States of America under the Homeowners Assistance Program, pursuant to P.L. 89-754 and P.L. 111-5, the Lessor shall have the right to terminate this lease by providing to the Lessee either a 30 or 60-day written notice to vacate the premises."

Q. If I had a contract to purchase my home prior to July 1, 2006, but closed after that date, do I qualify?

A. If you are a Military PCS eligible applicant and were under contract to purchase prior to 1 July 2006 and closed after that date, you would qualify. For applicants eligible as Wounded, Injured or Ill and Surviving Spouses the requirement to purchase the primary residence prior to July 1, 2006 does not apply.

Conventional HAP

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GENERAL QUESTIONS

Q. What is "Conventional HAP"?

A. Congress authorized the HAP program in the Demonstration Cities and Metropolitan Act of 1966. The HAP is a special relief program available to eligible military and civilian employee homeowners. When a program is approved, it provides some financial assistance to these homeowners when they are not able to sell their homes under reasonable terms and conditions because an announced closure or reduction in scope of operations at a military installation so adversely affects the real estate market. The Army Corps of Engineers (Corps) runs it on behalf of all the military branches.

Q. How do I apply?

A. Visit the HAP web site: http://hap.usace.army.mil/ and download the application package. Once you have completed the application, mail it to:

U.S. Army Engineer District, Savannah
Corps of Engineers
Attn: CESAS-RE-HM
100 West Oglethorpe Avenue
Savannah, Georgia 31401-3604

Q. If I am eligible, what should I do after I mail in my completed application?

Q. What rights do I have if I am not satisfied with decisions made regarding the Conventional HAP?

A. You have the right to appeal any decision denying benefits or contesting the amount of benefits allowed. No particular format is required. Simply submit a written statement of your objections to the district office. The appeal will be reviewed at the district level. If favorable action cannot be taken, your appeal will be submitted to higher headquarters. If a favorable decision cannot be made at this level, a final decision will be made by the Deputy Assistant Secretary of the Army.

ELIGIBILITY Q. Who is eligible for Conventional HAP assistance?

A. Conventional HAP applies to certain:

Active duty service members and federal civilian employees assigned at or near the affected installation.
Owner-occupant and assigned at or near the installation on the announcement date – military personnel who normally rotate back to the installation are also eligible.
A Non Appropriated Funds Instrumentalities (NAFI) employee at a facility operated in conjunction with the installation.
A civilian or NAFI employee who a U.S. citizen is serving overseas at the time of the announcement, who is entitled to reemployment rights at the affected installation.

Q. What are the specific eligibility requirements for Conventional HAP assistance?

A. An applicant must meet the requirements set forth below to be eligible for benefits under an approved HAP:

Type of Employment of Service. The applicant must be a member of the Armed Forces; a Federal civilian employee at, or a NAFI employee, who is an American citizen, at or in conjunction with, the affected installation. Temporary employees serving under a time limitation, including reservists serving less than 180-consecutive day tours (10 U.S.C. Section 101 (d) (6)(a), and private contractors and employees of private contractors are not included.
Place of Employment. The applicant must have been:

a member of the Armed Forces assigned at or near the installation;
a Federal civilian employee at a facility operated at, near, or in conjunction with the affected installation;
a NAFI employee at a facility operated in conjunction with the installation, or
a civilian or NAFI employee who is a U.S. citizen serving overseas at the time of the announcement, who is entitled to reemployment rights at the affected installation.

Time of Employment. The applicant must have been:

assigned to, or employed at, near, or in conjunction with the installation at the time of the announcement;
transferred or terminated as a result of a reduction-in-force, within six months prior to the public announcement;
transferred from the installation or activity on an overseas tour within three years prior to the public announcement of the closure action;
a member of the Armed Forces transferred from the installation within four years prior to the public announcement who, because of his/her military specialty and assignment planning, anticipated repeated assignments to the installation, or
serving overseas as a Federal employee, with existing reemployment rights to the affected installation at the time of the announcement.
Owner/Occupant. The applicant must have owned and occupied the residence on the date of announcement; and
suffered at least a 5% loss of value in community and 5% home value loss.

Q. Would a Federal civilian employee who chooses to PCS for a different job qualify for the program?

A. No. simply moving for a different job would not meet the qualifications of the HAP.

Q. If I retire do I qualify for HAP benefits?

A. Yes.

Q. If a person owns a farm (say 60 acres) and maintains a home on the farm, how much of the property qualifies under the HAP?

A. Only the dwelling and the portion of the land that would reasonably constitute a residential property within the area.

Q. My non-military spouse is the sole owner of the home, am I eligible for HAP benefits if I receive PCS orders?

A. Spousal ownership is allowed where either the applicant or a spouse is the fee simple owner of the property. Applicant must have been married to spouse at the time of the announcement. Where the applicant has an ownership interest with someone other than a spouse, the remaining owners must deed their interest to the applicant prior to Government acquisition. Where the applicant has an ownership interest with someone other than a spouse, private sale benefits will be paid in accordance with the amount of interest the applicant has in the property.

Q. Does the owner of a mobile home or a condominium qualify for HAP benefits?

A. Individual units in condominiums or cooperatives qualify. Mobile homes will qualify, if mobile home is affixed to the land in accordance with local and state laws and regulations, and the underlying realty is held in either fee simple, long term lease (27.5 years or longer) or contract to purchase.

BENEFITS Q. What is the basis for HAP benefits?

A. HAP benefits are based on the prior fair market value (PFMV) of the applicant's home.

Q. How long before I will receive my benefits?

A. The normal processing time is between 60 and 90 days provided all required documents are submitted.

Q. Will the Government reimburse me for mortgage interest?

A. For BRAC, WII/SS the Government will reimburse you for mortgage interest (not principal payments), taxes, and hazard insurance premiums that have been paid from the date the Corps district office received your application, or the date of vacating of the premises, whichever is later.

Q. Will my HAP benefits be taxable?

A. Yes. All payments above 95% of the PFMV are taxable.

Q. If I am foreclosed upon, what will the Government pay or not pay?

A. The Government will pay all legally enforceable liabilities; but will not make up past payments. If you deed the property back to the mortgage company in lieu of foreclosure, your application will be processed as a private sale. The Government will not pay outstanding judgment liens, encumbrances of a personal nature, or junior mortgages acquired after acquiring the property unless the junior mortgage was obtained at the same time as the original mortgage or used to improve the property.

Q. In a private sale, can I use a realtor to sell my home?

A. Yes. Using a realtor may increase your chances to find a buyer.

Q. A real estate agent expects a commission. Will the Government pay commissions when the Government purchases an applicant's home?

Q. Will I have to bring any money to closing?

Q. At what point should I market my home?

A. As soon as you know you will be relocating.

Q. What constitutes a reasonable effort for the sale of my home?

A. A visible, conscientious effort on behalf of the applicant such as listing the property with a real estate agent, advertising the property in a newspaper, adjusting the asking price to actively search for the actual current fair market value, etc.

Q. If I rent my home before I sell it, will it impact HAP benefits?

A. No. Rental income is not deducted from benefit payments.

Q. Do I need any HAP related additions to a purchase contract from a buyer?

A. Yes, you need to add the verbiage "Contract is contingent upon seller's eligibility for the Homeowners Assistance Program."

Department of Defense - Homeowners' Assistance Program