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Please Help with HAP Questions
Last Post Oct 15, 2019 06:16 AM by maureenowaters. 52 Replies.
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CoastGuardGuy
Posts:831


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Nov 22, 2009 12:10 PM

    I don't know who to trust and who to believe.

    My application is currently with HAP. I have a condo in California and I got PCSd to Miami.

    Can someone tell me:

    - If I sell for a loss, how much will HAP pay me/bank for the loss? What percentage?

    - Are we really exempt from all  taxes on our HAP benefits now? No tax issues to consider?

    - Do I have to tell the Bank I'm using HAP? Does it matter if they know? As long as they the the loan paid off I guess it  shouldnt' matter. I don't want to deal with Wells Fargo because they were a nightmare to deal with in the past.

    thanks for any help.

    If anyone here has been through the HAP process and can leave their phone or email address, I would greatly appreciate it.

    Angela
    Posts:831


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    Nov 22, 2009 04:14 PM
    • Correct Answer?

    Go to the following website:

    http://hap.usace.army.mil/EP_PCS.html

    Read CFR 32 Part 239 and the FAQs.  If you have any questions after that, I'd be happy to assist you.

    Angela
    Posts:831


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    Nov 22, 2009 04:36 PM
    • Correct Answer?
    1. You have to take a 10% loss if you go with a private sale. The Corps will pay reimburse you for anything over 10%. The calculation is as follows:

    90% of Prior Fair Market Value (PFMV) (purchase price) less the greater of your appraised value or selling price, (whichever is greater)

    So, if your PFMV is 100,000 and you sell for 85,000:

    90% x 100,000 = 90,000 - 85,000 = $5000 reimbursement

    Note: your pfmv may be more than your original purchase price if you have receipts to show any improvements and not repairs.

    If you go with a government buyout, you still have to have a buyer for your property. But, you will receive 75% or your mortgage payoff, whichever is greater. This would be a better option if you ask me. Though you still have to have a buyer, you are done with everything at closing and you don't have to take any loss. The government buys your house, pays your closing costs and turns around (usually the same day) and sells it to your buyer.

    2. Your HAP benefits are tax free.

    3. I don't think you have to tell your bank that you are using HAP as long as you have the funds to pay off your mortgage at closing. Anyone please correct me if I"m wrong.

    It really will be beneficial if you read 32 CFR Part 239 and the FAQs.

    My husband (active duty AF) and I applied last March for the HAP. We have had our home priced way to high for a year and a half. Friday, we were able to reduce the price $30K knowing we are now eligible for HAP. Of course, it took an appraisal and our realtor to tell HAP we were way to high. Originally, we were denied because the Corps' computer program that calculates home losses in a market stated our county had not declined 10%. However, I disputed that and they ran their numbers again and found that our county had in fact suffered a 10% loss. So, you see this is not all cut and dried. You have to keep on top of things.

    I will post any additional info about our application.



    CoastGuardGuy
    Posts:831


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    Nov 22, 2009 06:43 PM
    • Correct Answer?
    thank you so much Angela. That makes sense with the calculation. I wasn't sure about that even though I did read all over the website already.

    So can I choose to do the government buy out instead of the private sale?? Why wouldn't everyone just do the government buyout if they don't have to cover any loss when doing the government buyout option?

    I thought I had to do the private sell.

    You can't believe how stressed I've been about this for so long. I currently live on the East Coast and my wife is on the West coast primarily because of this damn condo. I just want to get rid of the damn thing. I can't wait.

    HAP has already requested a couple of more documents from me, but they say I should qualify.

    Do I just tell them if I want to do the government buyout instead of the private sell?

    thanks!
    CoastGuardGuy
    Posts:831


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    Nov 22, 2009 07:04 PM
    • Correct Answer?
    Angela,

    do you have an email where I can contact you?

    Sam
    Angela
    Posts:831


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    Nov 22, 2009 07:20 PM
    • Correct Answer?
    you can contact me at jatmgarvey@charter.net
    Angela
    Posts:831


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    Nov 22, 2009 07:29 PM
    • Correct Answer?
    CoastGuardGuy,
    The government buyout isn't the easiest in the world to accomplish but it can be done. From what I understand, you need to have a 3 star general's approval and your house has to have been on the market for 120 days. I would definitely call your HAP district office to find out more about the government buyout because things may have changed.

    We were told by our district office that we are in fact "eligible" and that we just needed to get a reasonable offer. Then we can choose between the government buyout or the private sale. Benefits will then send us a letter stating our benefits. In our case, I believe we will be going with a private sale because we had just had an appraisal done in Jan 2006 and for us a private sale makes more sense. Each case is different though and that is why it is a good idea to establish a raport with your couselor at the district office. CALL THEM. IT'S THEIR JOB! Ours has been awesome.

    I can sympathize with your situation. My husband was in Korea for a year and then commuted for year so we were split for 2 years, a year because we couldn't sell our house. After HAP didn't happen, we finally decided to rent our house out with a six month lease just hoping and praying that something would happen with HAP by the end of the six months. Praise God, it did! Now we just need to sell. Mind you we are renting our house out for less than our mortgage but something is better than nothing and it's worth it just to be back together as a family (we have 2 young children).

    Angela
    Posts:831


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    Nov 22, 2009 08:26 PM
    • Correct Answer?
    CoastGuardGuy,
    don't use that e-mail address. it was an alternate for me but it's no longer valid. I just realized it. Just post here and I will answer.
    CoastGuardGuy
    Posts:831


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    Nov 22, 2009 08:48 PM
    • Correct Answer?
    Angela,

    yes I do have a contact at HAP now which is good.

    can you contact me at supportguy@inbox.com ??

    thanks,

    Sam
    usmcfam5
    Posts:831


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    Nov 22, 2009 09:58 PM
    • Correct Answer?

     My husband is an AD Marine. We applied for HAP in March as well. We PCS'd overseas in August and are still waiting on any information. We purchased our home in SC for 276k and were told by our relator that he could not list it for anything higher than 190k. We are just barely able to keep making the payments. Does anyone have an opinion on trying to rent it at this point in time? 

    Angela
    Posts:831


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    Nov 23, 2009 06:31 AM
    • Correct Answer?
    usmcfam5,
    Did you realtor show you comparisons? It may be worth your money to have a formal appraisal done. We did and it didn't come out so nicely. We had to lower or price 75K from when it appraised in Jan 2006. Absolutely sickening.

    As far as renting goes, there is a clause on the HAP site that you could insert into your rental agreement. But have you checked with the HAP office? I honestly don't think I would get into a 6 month lease at this point in time. Have an appraisal done. Then you can lower your price based on that. Tell you realtor what price you will go to based on the appraisal but don't tell your realtor what the appraisal price is. You can accept an offer within 10% of your appraised price or present fair market value (if your realtor has showed you comparisons). Your realtor should be documenting the showings. You will also have to prove to the HAP office that you are listing your house at indeed a fair market value. You don't want to go too low.
    Joe and Deb - VR SAMUser is Offline
    VR SAM
    Senior Member
    Senior Member
    Posts:328


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    Nov 24, 2009 03:33 AM
    • Correct Answer?

    Hi folks, have been catching up on forum posts and wanted to clarify a couple of items.   I may have slept through this, but my last information was that we were still awaiting final legislation that made any amounts covered by the government from HAP a non-taxable event for federal taxes.  

    Angela, do you have a link that clarifies this?   Under the BRAC HAP program it was exempt, but the stimulus language for the PCS HAP overlooked that exemption and it was my underrstanding that folks still had to pay the taxes until the letislation was signed.   Again, have been on the road and may have missed it.    

    Also, while many of our service members are from states that exempt military from paying state taxes, each state may view this differently so you would want to check with your accountant / tax preparer on all of this.  

    Angela, thanks for your insight.  Joe Gladden 

     

    Joe and Deb Gladden
    703 754-3036
    Fax: 703 848-3690
    homesformilitary@vrsam.com
    http://www.vrsam.com
    Specializing in Military, Defense Contractors, Fed Employees Relocation.
    Ask us About Fawn Lake - Virginia's Best Kept Secret!
    Angela
    Posts:831


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    Nov 24, 2009 07:26 AM
    • Correct Answer?
    Please see HR 3590:

    http://hap.usace.army.mil/Documents...R_3590.pdf

    http://hap.usace.army.mil/Documents...mption.pdf

    Joe, you are correct about state taxes. Each state may be different but I believe that many states how now passed bills to make the benefits tax exempt as well.

    Angela
    Angela
    Posts:831


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    Nov 24, 2009 08:40 AM
    • Correct Answer?

    Now that I look I'm really not sure which bill number it is.  In any case, USACE says benefits are tax exempt and I know I've seen it blogged all over the place but I didn't catch the number and my google results aren't so great.

    Joe and Deb - VR SAMUser is Offline
    VR SAM
    Senior Member
    Senior Member
    Posts:328


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    Nov 24, 2009 01:43 PM
    • Correct Answer?

    Thanks.  Knew it was coming, just couldn't remember if it had been signed.  Joe

    Joe and Deb Gladden
    703 754-3036
    Fax: 703 848-3690
    homesformilitary@vrsam.com
    http://www.vrsam.com
    Specializing in Military, Defense Contractors, Fed Employees Relocation.
    Ask us About Fawn Lake - Virginia's Best Kept Secret!
    anon1
    Posts:831


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    Nov 24, 2009 04:47 PM
    • Correct Answer?
    So, has the non-taxed part actually been passed and signed? I can't see on the link that it was actually signed.

    This would be the best news we've had in almost a year on HAP, wouldn't it?! Thanks!
    anon1
    Posts:831


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    Nov 24, 2009 04:59 PM
    • Correct Answer?
    OK, I just saw this on militarytimes.com. Looks like the healthcare debate is taking precendence? Unless something has changed?

    Story:

    By Rick Maze - Staff writer
    Posted : Thursday Oct 8, 2009 20:25:52 EDT

    A bill that would provide tax breaks to service members trying to buy or sell a home passed the House of Representatives on Thursday by a unanimous vote.

    The Servicemembers Home Ownership Tax Act of 2009 would give deployed service members extra time to qualify for an $8,000 homebuyer tax credit for first-time purchasers that expires on Dec. 1, and would exempt those forced to move by military orders from having to give back the money if they sell a home after owning it for less than three years.

    The bill also would exempt from federal income taxes the financial aid provided to service members under the expanded Homeowners Assistance Program, which helps those forced to sell a home at depressed prices because of government-ordered moves.

    The tax-free status of HAP payments would apply to any payments made after Feb. 17, 2009.

    Expansion of the homebuyer tax credit, which also applies to some Foreign Service officers and intelligence community personnel, gives anyone deployed outside the U.S. for 90 days or longer between Jan. 1 and Dec. 1 of this year one extra year to claim the credit. If married, the extension to Dec. 1, 2010, also would apply to their spouse.

    Waiver of the requirement to “recapture” the $8,000 tax credit if a home is sold within three years would apply to service members, Foreign Service officers and intelligence community employees who are ordered to a new duty station by government orders.

    The bill, HR 3590, now goes to the Senate, where it will be referred to the Senate Finance Committee that is responsible for tax-related legislation.

    That committee is tied up at the moment with national health care reform legislation and is not expected to address the House-passed tax measure until later this year.
    HAPpy
    Posts:831


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    Nov 24, 2009 06:12 PM
    • Correct Answer?
    Q. Will my Expanded HAP benefits be taxable?
    A. No. President Obama signed HR 3548, Unemployment Compensation Extension Act of 2009 into law and thereby exempted Expanded HAP benefit payments from taxation. Payments to military members are not subject to social security or Medicare taxes.
    anon1
    Posts:831


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    Nov 24, 2009 06:57 PM
    • Correct Answer?
    This is awesome!

    I do, however, wonder if there is somewhere we can actually look to see the signed bill with our own eyes? I have a small amount of faith in the Q&A section of the HAP website since they are infamous for printing answers to questions and then changing their answers on their site after "new information" becomes available. So, I'm not entirely convinced until I can look up on an official website and see it for my own eyes. Anyone know where to find such proof? I have googled and googled and all I come up with are info about the bill and the stuff I posted from October.

    Thanks, HAPpy for the post... I wish I wasn't so jaded and then I'd believe it. LOL!
    HAPpy
    Posts:831


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    Nov 24, 2009 08:09 PM
    • Correct Answer?
    The Bill is H.R.3548

    located here

    http://thomas.loc.gov/cgi-bin/bdque...:H.R.3548:

    Latest Major Action: Became Public Law No: 111-92

    text of bill

    SEC. 14. EXCLUSION FROM GROSS INCOME OF QUALIFIED MILITARY BASE
    REALIGNMENT AND CLOSURE FRINGE.

    (a) In General.--Subsection (n) of section 132 of the Internal
    Revenue Code <> of 1986 is amended--
    (1) in subparagraph (1) by striking ``this subsection) to
    offset the adverse effects on housing values as a result of

    [[Page 123 STAT. 2996]]

    a military base realignment or closure'' and inserting ``the
    American Recovery and Reinvestment Tax Act of 2009)'', and
    (2) in subparagraph (2) by striking ``clause (1) of''.

    (b) Effective <> Date.--The amendments made
    by this act shall apply to payments made after February 17, 2009.
    SEC. 15. DELAY IN APPLICATION OF WORLDWIDE ALLOCATION OF INTEREST.

    (a) In General.--Paragraphs (5)(D) and (6) of section 864(f) of the
    Internal Revenue Code of <> 1986 are each amended by
    striking ``December 31, 2010'' and inserting ``December 31, 2017''.

    (b) Conforming Amendment.--Section 864(f) of the Internal Revenue
    Code of 1986 is amended by striking paragraph (7).
    (c) Effective <> Dates.--The amendments made
    by this section shall apply to taxable years beginning after December
    31, 2010.

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