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WASHINGTON, D.C. (March 4, 2009) - Some
military families are finding themselves in a precarious situation
when it comes to selling their house and relocating, said housing
experts.
Some bought their homes at the height of the market and now,
because of permanent-change-of-station orders, are trying to sell
in today's lower market, said Edmond Hackett, housing management
specialist, Fort Belvoir, Va. The good news is that the new
economic stimulus package has provisions to help military
homeowners and Army Emergency Relief is also helping those hit by
the crunch.
"It's a reality in this area and all over, there are a lot of
foreclosures and this is affecting our Soldiers too," said Hackett.
"Many sellers can now expect to sell below their purchase
price."
The flip side of this housing market is that renters are not
immune to the effects of foreclosure either.
"In the past couple of months, approximately five Army families
have had to deal with losing the homes they were renting when the
owners faced foreclosures," said Shawn Walters, housing management
specialist, Fort Belvoir. "One good thing for these families is
that now the government will move them, that's a big change from
the past and is a real help to the families."
An attachment to the Joint Federal Travel Regulations added
about five months ago authorizes a local or short-distance move of
household goods for servicemembers forced to relocate because the
home they were renting is in foreclosure.
Although there are no specific programs to help Soldiers when
they are behind in their mortgage, Army Emergency Relief is an
avenue for assistance in this tough market, said Dennis Scott,
assistant secretary of administration, AER.
"Since the housing market crashed, we are looking at housing
differently," said Scott. "Multiple-home ownership used to be
considered a business venture and AER doesn't assist in that, but
now we realize it might be because of an inability to sell in one
location."
When applying for assistance at AER, it must be a solution to
the problem not a partial fix said Scott.
"If you need to catch up on your mortgage and once caught up you
can continue to pay because of a new job or a raise that would be a
solution. If you have a buyer and need to pay back-payments prior
to selling that would be a solution. These would be good examples
of how AER could help," said Scott.
In 2005, AER provided a total of $44 million in assistance; but
in 2008, they provided a total of $82.9 million in no-interest
loans. The increase is mostly due to the economy, said Scott.
The unique situation of the Soldier has not been overlooked by
the president and Congress. The new economic stimulus package has
included provisions to address servicemembers facing losses in the
housing market. The American Recovery and Reinvestment Act of 2009
was passed by Congress Feb. 13 and signed into law Feb. 17 by
President Obama.
Under the new provision, the government will cover 95 percent of
the amount lost when forced to sell. The provision now applies to
servicemembers who PCS more than 50 miles outside their current
installation and need to sell their homes.
The stimulus package extends the Defense Department's Homeowners
Assistance Program by $555 million. HAP was originally designed to
assist Soldiers who face a financial loss when selling a home
located in an area where real estate values have declined due to an
installation closure or realignment.
The provision does have some limitations. The program only
applies to servicemembers who purchased their homes before July 1,
2006 which is roughly the time when the housing market started to
decline.
While housing services, AER and Congress have provided some
relief and assistance, experts offer caution before entering into
any housing contract.
"Pay attention to leases, work with reputable realtors and have
the Staff Judge Advocate Office look over all contracts before you
sign," said Walters.
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