Live at the IMCOM Booth at AUSA: Details on the Homeowners Assistance Program

We are privileged to have with us today, Ms. Diann Thompson, Realty Specialist, Homeowners Assistance Program (HAP), U.S. Army Corps of Engineers (USACE). The HAP was expanded by the American Recovery and Reinvestment Act 2009 (ARRA) which was signed by President Obama in February.

Ms. Thompson provided the following detailed overview of the HAP, including eligibility criteria and information on the application process:

Overall:

-- The Department of Defense (DoD) announced on September 30, 2009, details for the temporary expansion of the Homeowners Assistance Program (HAP). The program was created by Congress in 1966 to financially compensate eligible service members and Federal civilian employee homeowners faced with losses on the sale of their property due to a reduction-in-scope of operations due to Base Realignment and Closure (BRAC).

-- The expansion of the program authorizes temporary assistance for members affected by the mortgage crisis. The Department of Defense designated the US Army as the executive agent for the HAP. The US Army Corps of Engineers (USACE) administers the program for the Department of Defense.

-- The American Recovery and Reinvestment Act of 2009, signed into law by President Obama in February, provides $555 million for expansion of the HAP. Recovery Act funds are being used to temporarily increase support for eligible service members, DoD civilian, and Coast Guard families that are affected by the economic downturn as they are forced to sell their homes at a loss.

-- Like many Americans, DoD families feel the economic downturn’s impact as they also cope with the unique challenges of military life. They often don’t get to choose when they move and may be forced to sell their homes when they don’t want to. Often, service members are ordered to change duty stations and establish new homes sometimes every two to three years.

-- The HAP program partially offsets losses certain service members, surviving spouses, and civilian employees incur when they have to sell homes at a loss and relocate.

-- While the HAP expansion is not designed to pay 100 percent of the losses, it can help protect eligible applicants from financial catastrophe due to home sale loss in value. Under current law, HAP benefits above current fair market value (sale price) will be taxed as part of applicant’s gross income (Federal, state, local). The benefit payment is subject to withholding taxes. There is pending legislation in Congress that if signed into law, would eliminate tax liability from the HAP benefits.

-- DoD will fund projects and programs to help sustain the All-Volunteer Force as the best in the world, give Wounded Warriors care that has no equal, and provide military families a quality of life matching their service and sacrifice.

Eligibility Criteria:

-- After conducting an extensive analysis to determine how best to prioritize the finite $555 million available while maximizing assistance to as many people as possible, the DoD developed specific eligibility criteria designed to take care of people in the greatest need.

-- The American Recovery and Reinvestment Act of 2009 (ARRA), Public Law 111-5, expanded the HAP to provide assistance to:

1) Wounded, injured or ill members of the Armed Forces (30% or greater disability) and wounded DoD and Coast Guard civilian homeowners reassigned in furtherance of medical treatment or rehabilitation or due to medical retirement in connection with their disability;

2) Surviving spouses of the fallen;

3) BRAC 2005 impacted homeowners relocating during the mortgage crisis; and

4) Service member homeowners undergoing Permanent Change of Station (PCS) moves during the mortgage crisis. Subject to availability of funds.

-- Similar to the Recovery Act’s “Cash for Clunkers” program, homeowners eligible through 2005 BRAC and PCS criteria will be processed based on the availability of funding.

HAP Process:

-- USACE executes the program through three field offices, the Savannah, Ft. Worth, and Sacramento Districts. These field offices evaluate applications to determine eligibility and benefit award.

-- Applicants should visit the HAP web site: http://hap.usace.army.mil/ and download and complete the application package and send to USACE HAP Field Office for the area in which the applicant’s home is located.

-- The HAP application processing could not occur until program details were published in the Federal Register for public comment, because the proposed HAP expansion affects surviving spouses of deployed Service members and forward-deployed civilian employees. The rule was published on September 30, 2009.

-- There are approximately 4,000 applications awaiting to be processed. Due to the large number of applications waiting to be processed, it may take up to six months before the HAP Field Offices can complete initial processing. Applications will be processed as quickly as possible, according to eligibility priority category.

-- BRAC 2005 and PCS applicants will need to find a buyer of their homes in order to receive Expanded HAP benefits. Surviving spouses and wounded, injured and ill members do not need a buyer to receive expanded HAP benefits.