Changes Recommended to BAH rates in Madison, Wisconsin to combat housing affordability

  The Basic Allowance for Housing (BAH) is a critical component of the compensation package for U.S. military servicemembers, designed to cover housing expenses including rent and utilities. This allowance is crucial for ensuring that military families can afford safe and suitable housing, regardless of where they are stationed. However, recent changes and legislative efforts have highlighted ongoing challenges and the need for reforms to address housing affordability for military families. BAH: A Brief History BAH was initially set to cover 100% of average rental and utility costs for servicemembers. This full coverage was established in 2005, effectively eliminating out-of-pocket housing expenses for military personnel. However, in response to budget pressures, the 2015 National Defense Authorization Act (NDAA) allowed the Department of Defense (DoD) to reduce BAH coverage to 95%. This reduction was phased in from 2015 to 2019, leading to increased financial burdens on servicemembers. Recent Legislative Efforts In an effort to address the financial challenges faced by military families, lawmakers have introduced a bill to fully fund BAH for Fiscal Year (FY) 2025. The bill would authorize $1.2 billion to restore BAH coverage to 100%. This move is seen as a temporary measure to address immediate housing affordability issues, circumventing Congressional Budget Office scoring mechanisms that could lead to additional offsets in other areas. Military families deserve an allowance that covers their housing costs, not one that forces them to pay hundreds of dollars out of pocket amidst skyrocketing rents, inflation, and other financial pressures. Advocacy groups, like the Military Officers Association of America (MOAA), have been pushing for the restoration of BAH to 100% to ensure the financial readiness of servicemembers and their families. Impact on Servicemembers and Families The reduction in BAH coverage to 95% has left many military families struggling to cover their housing and utility costs. According to the DoD, average out-of-pocket housing costs range from $85 to $194 per month. However, more than 70% of respondents to the 2023 Blue Star Families’ annual Military Family Lifestyle Survey reported paying more than $200 out of pocket per month. The financial strain of insufficient BAH can force military families to prioritize one basic need over another, impacting their overall quality of life. For instance, an average E-5 with dependents in 2024 will pay $1,416 out of pocket for housing annually, while an average O-3 with dependents will pay $1,692 annually. This financial burden can lead to retention problems within the uniformed services, as servicemembers may seek better financial stability outside of the military. BAH Rates in Madison, WI For servicemembers stationed in Madison, WI, the BAH rates for 2024 are as follows: Rank With Dependents Without Dependents E1 $1,908 $1,431 E2 $1,908 $1,431 E3 $1,908 $1,431 E4 $1,908 $1,431 E5 $2,109 $1,587 E6 $2,448 $1,836 E7 $2,637 $1,977 E8 $2,838 $2,184 E9 $3,015 $2,277 W1 $2,469 $1,854 W2 $2,721 $2,181 W3 $2,970 $2,292 W4 $3,033 $2,493 W5 $3,114 $2,682 O1E $2,673 $2,106 O2E $2,931 $2,256 O3E $3,045 $2,442 O1 $2,157 $1,704 O2 $2,445 $2,043 O3 $2,961 $2,322 O4 $3,138 $2,646 O5 $3,258 $2,763 O6 $3,285 $2,949 O7 $3,309 $2,997   Housing Market Trends Over the past five years, the housing market has experienced significant price increases. According to data from John Reuter from Integrity Homes of Wisconsin, the average home price in the U.S. has risen by approximately 36% from 2018 to 2023. Rental prices have also seen substantial increases, with the national median rent climbing by about 25% during the same period. These trends highlight the growing affordability crisis, which disproportionately impacts military families who rely on BAH to cover their housing costs.   Free home evaluation by John Reuter - Integrity Homes, Real Broker, LLC   Conclusion Restoring BAH to 100% of housing costs is crucial for alleviating the financial burdens on military families and ensuring they have access to safe and affordable housing. Legislative efforts to fully fund BAH for FY 2025 represent an important step towards addressing these challenges. However, long-term solutions are needed to provide stable and sufficient housing allowances for all servicemembers, supporting their financial readiness and overall well-being.       For more information and to receive updates please follow our blog, and hit the subscribe button.       John Reuter Integrity Homes  Broker/Owner 608.669.4226 john@integrityhomeswi.com         

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New VA Rules and NAR Settlement: What Military Home Buyers Need to Know

As an experienced Realtor and Air Force Veteran, I understand the unique challenges veterans face in the home-buying process. Recent developments in the real estate industry, including a significant settlement involving the National Association of Realtors (NAR) and changes implemented by the Department of Veterans Affairs (VA), will impact how homes are bought and sold. Here’s what you need to know. NAR Settlement and Its Implications In March 2024, the NAR announced a $418 million settlement to resolve over a dozen antitrust lawsuits alleging that the association’s rules inflated real estate commissions. While NAR admitted no wrongdoing, this settlement represents a major shift in real estate transactions. By mid-August 2024, home sellers will pay smaller commissions, retaining more of their sales proceeds. Buyers, not sellers, will determine how much their agents are paid. This change stems from a federal class-action antitrust lawsuit, Burnett v. National Association of Realtors et al., where a jury sided with plaintiffs, asserting that NAR and large brokerages conspired to inflate commissions. With the cooperative compensation rule eliminated, sellers will no longer set commissions for buyer's agents in MLS listings. Buyers will now negotiate directly with their agents regarding payment method. Impact on Real Estate Negotiations The new rules will undoubtedly complicate negotiations, especially for buyers with limited cash reserves. Buyers and their agents may need to negotiate for sellers to cover the agent fees, integrating these costs into the mortgage.  Wisconsin’s Proactive Approach As a Realtor, and like many others from the Madison area and the State of Wisconsin, we have always allowed commissions to be negotiated just like anything else. We have also required customer disclosure forms or buyer agency agreements with every transaction. Our state-approved buyer agency agreement includes a mandatory section for commission details. Over 22 states did not require buyers to have any representation or disclosure stating they knew their rights when purchasing a home. In our opinion, home sellers will still opt to pay buyers' agent commissions. Sellers who do not could find themselves at a competitive disadvantage. VA’s Temporary Local Variance for Buyer-Broker Charges In response to the shifting market, the VA has introduced a temporary local variance allowing veterans to pay for certain buyer-broker charges. Historically, VA regulations prevented veterans from covering real estate brokerage fees. However, the Under Secretary for Benefits has authorized this variance to ensure veterans remain competitive buyers. Here are the key points of the VA’s temporary variance: Eligibility: The home must be in an area where listing brokers are prohibited from setting buyer-broker compensation or where such compensation cannot flow through the listing broker. Payment Restrictions: Buyer-broker charges cannot be included in the loan amount. Veterans must have sufficient liquid assets to cover these costs. Documentation: While an invoice is not required, the total amount paid must be recorded on the Closing Disclosure, and the buyer-broker representation agreement must be included in the loan file. Encouraging Negotiation The VA encourages veterans to negotiate the amount paid to their buyer-broker. This temporary variance does not prevent sellers from covering these charges, and such payments are not considered seller concessions. Effective Date and Further Information The VA circular is effective starting August 10, 2024, and will go until recinded by the Department of Veteran Affairs.  Conclusion These changes are designed to foster a more competitive and transparent real estate market. As a veteran and Realtor, I recommend staying informed and shooting us a call, text, or e-mail with any with any questions you have. Just as we previously have done, we will continue to give rebates to veterans when they buy and sell, and our local network of providers that give discounts to veterans continues to get stronger and stronger. Whether you’re buying or selling, understanding these shifts will help you make better decisions and achieve your real estate goals. John Reuter Broker/Owner Integrity Homes  608-669-4226 john@integrityhomeswi.com     Real Broker, LLC

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Home Prices Up, Home Prices, but what is my value? Find out here.

What is the Value of your Home?  We have seen tons of news articles both locally and nationally about home prices, where the real estate market is at, is it going to crash or not, interest rates, etc., etc. The main question for a homeowner, is what is the actual value of my home right? A home is an investment just like a 401k, IRA, or similar account. You may spend hours and hours looking for the next DOGE coin or Amazon, but how often do you check on the ACTUAL value of your home? I am going to guess that you only check on your home value when the idea of moving pops into your head, or if you have a big life circumstance such as marriage, new child, divorce, death, relocation, etc.  Am I right?  With our new home evaluation tool, you will get updates on the value of your home, so you track and see how your investment is going.  Get my home value! Our search tool uses information available from public records and the MLS to get the value of your home.  While nothing replaces a custom home evaluation done by your truly (me), this is a great starting point to see the value, and track market fluctuations.  At any point in time, I can do a free market analysis for you.  For some people we do them yearly or every couple of years depending on what they request. Always free, always no obligation or anything else.  Feel free to check out the Home Evaluation Tool, and tell us what you think.  I am always available to answer any questions you might have about the real estate market, home owner tips, maintenance, etc.     John Reuter  Integrity Homes  Broker/Owner  608-669-4226 john@integrityhomeswi.com    Brokered by Real Broker, LLC 

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