Big Change To DoD HAP Benefits

Over the past few years the DoD Homeowners Assistance Program has helped thousands of service members sell their underwater homes.  The program has morphed and changed a number of times since it was first implemented.  The latest change is a big one and service members who own homes in Northern Virginia need to be aware of the impact.

Previously the DoD HAP program offered 3 options for home sellers.  The most widely used is the Government Acquisition option where the government flips the home from the seller to the new buyer paying off the old mortgage at settlement.  That’s a simplified version but covers the basic idea.

The second option is known as a Private Sale.  In this case the service member sells the home directly to a buyer and then is reimbursed by HAP for the benefits due after the sale is completed.  These sales have worked for service members who made a significant down payment and the current market value was above the amount owed on the mortgage.

The third option which has been eliminated, was known as either the Private Sale Augmentation (PSA) or Government Assisted Private Sale (GASP).  With this option HAP would provide a check at settlement to cover the difference upfront.   After deductions for closing costs, commission and mortgage payoff, the service member would get a check back from the settlement company based on the HAP benefits formula usually within a few days after the transaction had been completed.

What does this mean if you are considering a DoD HAP sale?

It means you may have a difficult decision to make.  Even though you may have made a down payment or qualified improvements to your home you are going to front the money to get to closing under the Private Sale option.  If you do not have those funds available then you will need to  sell your home under the Government Acquisition option or keep your home as a rental property until the housing market recovers.

If you qualify for the Department of Defense Homeowners Assistance Program and left behind a home in the Northern Virginia are give me a call at 703-346-2213 or drop me an email at [email protected]  Let’s talk about how the change in the program may impact the sale of your home in Northern Virginia.

You should also contact the HAP Savannah Regional Office to discuss your options directly with a HAP Realty Specialist.


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