I am thankful for the inclusion of PCS movers in HAP but it is frustrating over the amount of time the entire process is taking. I paid over 1/2 of my yearly salary to close on my home in AZ so that I could re-locate my family with me in VA. To date, we are still waiting for the rules to be published in the Federal Register before any claims can be processed per the HAP website. I am thankful that I never lived outside of my means and therefore had the money to utilize vice the scenario that many others are in which is causing them to foreclose, short sale (if they can) or leave their loved ones behind which in turn impacts their financial status in a negative manner. It is not rosy and the program is not intended to fully reimburse us for our loss: as some may believe. Furthermore, any reimbursement we receive will be considered taxable income which in the long run, equates to a smaller reimbursement.

I am confused about the tax implications of HAP. If we are 40,000 upside down on our home, we would have to pay taxes on that 40,000 if we sell?? Would we not have to pay taxes on the $40,000 if we short-sale???

Fortunately it appears the HAP benefit won’t be taxable if things go as planned by the DOD. If it is taxable, the financial benefit you would receive from the HAP would be considered income for tax purposes. Normally short sale and other forms of debt forgiveness are also considered taxable. But there is tax relief for these times currently under the Mortgage Forgiveness Debt Relief Act of 2007. Read more about it here: http://www.irs.gov/newsroom/article/0,,id=205004,00.html

P.S. If you are currently serving, I would check with your legal office, commander and personnel office to see how a short sale or foreclosure will impact your career and security clearance. Better to be safe than sorry.

I understand to qualify for expanded HAP your home cost cannot exceed fannie mae and freddie mac limits. Some buyers put 20 percent cash down and had fixed rate mortgages and did not overextend themselves but still took 90K $ hit when selling home for PCS. As a result, the more affluent military members are no longer spending money in the marketplace. Ultimatley affecting the overal economy. Long story short do not buy what you cannot pay for.
This program seems to be structured for people who made poor choices.

Is the Federal Register Lost ? Does Bin Laden have it ? Someone needs to find it ASAP so the rules can be published. This is ridiculous. Im lucky to been able to rent my home for 900 less than the mortgage but my tenants are leaving and im sinking fast. HELP

The Military Family Tax Relief Act of 2003 specifically excluded most HAP benefits from taxable income. However, DoD does not think the 2003 act applies to the expanded HAP (although they would like it to apply). When I asked if HAP’s understanding was that the 2003 act did NOT apply to the expanded program, a HAP representative responded, “Yes. It is my understanding that attorneys at OSD level have reviewed the law and determined the current tax laws require that ARRA Expanded HAP applicants will be taxed on all program benefits above their home’s current fair market value as part of their gross income.” I am confident this was not Congress’ intent when they expanded HAP, since the Military Family Relief Act of 2003 and the Mortgage Forgiveness Debt Relief Act of 2007 both work towards reducing the tax burden due to mortgage debt relief. I urge individuals and MOAA to get involved to ensure Congress’ intent in expanding HAP is fulfilled.

ALL THAT HAP AND EXTEND HAP DOES IS TO TAKE CARE OF THE BANK AND LEAVE THE SERVICE MEMBER HOMELESS. THESE PROGRAM IS INTENDED TO BENEFIT THE BANKS AND NOT THE SERVICE MEMBER. FOLLOW THE MONEY!!!!

Its true HAP does NOT help our brave men and women in unform
with a mortgage principal reduction or Loan modification option.. Its a fact that this program will leave a huge number of Military Service members HOMELESS>>>>

FYI:
Tax Liability of
Expanded HAP Benefits
• Expanded HAP benefit tax liability was
eliminated when the President signed the
Unemployment Compensation Extension
Act of 2009 into law on 7 Nov 2009.

This is in the Army Core of Engineer’s HAP Expansion Brief/Nov 09

HAP worked for me… yes, it took time, and yes, I had to drain assets to close the sale and wait for HAP to reimburse me. However, I sit here today with $100K that I wouldn’t have without HAP and my loss was limited to 10% of purchase price.

Don’t knock a Gov’t program to “bailout” those of us that made poor decisions and bought in a real estate bubble… there are thousands out there that don’t have a bailout option and will have destroyed credit because of it.

HAP benefits are also now NON-TAXABLE. Hopefully, the people taking advantage of HAP will be able to buy a reasonably priced home at their next duty station.

I sold my house with a Short Sale. The bank accepted the short sale and “wrote off” the $145K as a loss. This loss affected my credit and I had to file bankruptcy.

Can anyone tell me if I’m eligible to receive any portion of the $145K back under the HAP Program?

Yes..They will reimburse you up to 90% of your loss….Good Luck..I hope it works out for you..you sound like a really nice guy…

HAP only helps some service members. In fact, if a Service Member is doing the correct thing and PCSing every three years, no help is offered. Congress should adjust the date to help those who really need it.

What are they going to do about the people who, like us, did put down 10% and are still taking a 50K hit on our house? We bought in 2007 so aren’t eligible for HAP. It woudln’t be such a big deal except for the fact that DH made LDO so now we’re moving two years earlier than planned! I either have to stay here with the kids and wait for the economy to improve or hope congress extends the program to those who bought after 6-1-06

left out also we will be lucky to eat!! seems so unfair some get help some dont why did wer have to pcs in tjh