Understanding Overseas Housing Allowance (OHA): Your Guide to Housing Abroad

Last updated 6 months ago. Our resources are updated regularly but please keep in mind that links, programs, policies, and contact information do change.

Moving overseas for a military assignment brings unique challenges, especially finding and paying for housing. The U.S. Department of Defense (DoD) offers the Overseas Housing Allowance (OHA) to help eligible service members cover these costs when stationed outside the continental United States (OCONUS). This guide breaks down everything needed to understand OHA – what it is, who gets it, how it works, and where to find official resources.

Decoding OHA: What It Is and Who Gets It

The Official Purpose: Offsetting Housing Costs Abroad

OHA is officially defined by the DoD as a cost-reimbursement allowance. It specifically helps offset housing expenses service members incur when assigned to permanent duty overseas and authorized by their command to live in privately-owned or leased housing rather than government quarters. This allowance is a key part of the broader Overseas Housing Program.

The fundamental goal is enabling service members and their families to secure suitable and adequate housing in foreign locations, acknowledging that housing costs and living conditions can differ significantly from those within the United States.

Understanding the distinction between OHA as a “cost-reimbursement allowance” and the stateside Basic Allowance for Housing (BAH) is crucial. BAH is generally considered an “allowance” provided to offset the average cost of housing in a particular U.S. location, and it’s not directly tied to actual rental expenses. OHA, conversely, is structured to reimburse actual, documented housing costs up to specific limits established for the location, rank, and dependency status. For instance, the rent component of OHA covers the actual lease amount or the maximum rent cap, whichever is lower. Certain components of the Move-In Housing Allowance (MIHA) also operate on a dollar-for-dollar reimbursement basis, requiring receipts.

This reimbursement model has significant implications. Unlike BAH, where service members might keep the difference if their rent is below the allowance rate, OHA typically doesn’t allow for “pocketing” excess funds because payments are tied to incurred expenses. This structure necessitates more thorough documentation from the service member, including lease agreements and, for certain MIHA claims, specific receipts. Consequently, budgeting with OHA requires diligent tracking of actual expenditures against the allowance received, a process that can be more involved than managing BAH stateside.

General Eligibility: The Basics for Overseas Assignments

In general terms, OHA eligibility extends to uniformed service members across all branches (Army, Navy, Air Force, Marine Corps, Coast Guard, Space Force) who are on active duty and assigned to a permanent duty station (PDS) OCONUS. This includes commissioned officers, warrant officers, and enlisted personnel.

Eligibility requires that the service member be authorized by their command to reside in private sector housing, either leased or owned, typically because adequate government-provided quarters are not available or have not been assigned. Certain members of the Reserve Component, such as Army Reserve Soldiers on active duty under Title 10 USC orders, may also qualify for OHA. Retired military personnel are not eligible for this allowance.

Are You Eligible? Navigating the Specifics

Key Eligibility Checkpoints: Duty Location & Government Quarters

Eligibility for OHA isn’t automatic upon receiving OCONUS orders. Several key factors determine qualification, primarily the assigned duty location and the availability of government housing. OHA rates are highly location-dependent, varying significantly from one country or city to another.

A critical factor is the official authorization to live off-base, often referred to as living “on the economy.” If adequate government quarters (such as barracks for single members or family housing units) are available at the assigned PDS, and the command directs the service member to occupy them, OHA will generally not be authorized. The decision to authorize off-base living often rests with the local command and housing office, based on housing availability and local policies. Some installations may have waiting lists for government housing, with varying procedures and priorities based on rank, family size, or arrival date. In some cases, particularly for junior enlisted personnel, residing in government quarters might be mandatory.

Because authorization depends heavily on local conditions and command policies, service members shouldn’t assume they’ll receive OHA upon arrival OCONUS. Proactive communication with the gaining unit’s sponsor and the installation housing office is essential before making any housing commitments. Understanding the local housing situation, waitlist procedures, and any mandatory assignment policies can prevent significant stress and unexpected financial burdens. While awaiting permanent housing (either government or private sector), service members may be authorized Temporary Lodging Allowance (TLA) to partially offset the cost of temporary accommodations.

How Rank, Dependents, and Service Branch Play a Role

OHA rates are further refined based on the service member’s pay grade (rank) and dependency status (whether they are accompanied by authorized dependents at the OCONUS location). As a general rule, maximum OHA allowances increase with rank. Members authorized to have dependents accompany them (“with-dependent” status) typically receive higher maximum rent and utility allowances compared to those without dependents or on unaccompanied tours (“without-dependent” status).

The distinction based on dependency status is significant. For example, unaccompanied members, or those whose dependents are not authorized to join them at the PDS, usually receive a rent allowance capped at 90% of the with-dependent rate and a utility allowance set at 75% of the with-dependent rate. Special provisions, such as Family Separation Housing (FSH-O), exist for members serving unaccompanied tours who maintain dependents at a different location, allowing them potentially to receive OHA at the without-dependents rate for their OCONUS housing and BAH for their dependents’ location.

While the overarching OHA policy is established by the DoD and applies across all service branches, minor variations in implementation procedures or local command interpretations might exist at different installations or within different services. However, the core eligibility rules and allowance structures remain consistent.

The Rulebook: DoD Financial Management Regulation (FMR)

The definitive and authoritative source for all regulations governing military pay and allowances, including OHA, is the Department of Defense Financial Management Regulation (DoD FMR) 7000.14-R. Volume 7A of the FMR specifically addresses policies for Active Duty and Reserve Pay. Within Volume 7A, Chapter 26 provides the comprehensive and detailed policy guidance on Housing Allowances, covering both BAH and OHA in depth.

Service members seeking the most precise technical details, specific calculations, or guidance on unique or complex situations should refer directly to this chapter. It can be accessed online via the Defense Finance and Accounting Service (DFAS) or DoD Comptroller websites. The official link is: https://comptroller.defense.gov/Portals/45/documents/fmr/current/07a/07a_26.pdf. Other relevant FMR chapters include Chapter 68, which details policies for OCONUS Cost-of-Living Allowance (COLA) and Temporary Lodging Allowance (TLA). Additionally, the Joint Travel Regulations (JTR) contain related information pertinent to housing and travel entitlements during PCS moves and while stationed OCONUS.

OHA’s Building Blocks: Rent, Utilities, and Move-In Costs

Overseas Housing Allowance isn’t a single, monolithic payment. Instead, it comprises three distinct components, each designed to address a different aspect of housing costs incurred while living OCONUS: a Rent Allowance, a Utility/Recurring Maintenance Allowance, and a Move-In Housing Allowance (MIHA). Understanding each component is key to managing finances effectively overseas.

Rent Allowance: Covering Your Lease (Up to the Cap)

The Rent Allowance is the primary component of OHA, intended to reimburse the actual monthly rent paid for privately leased housing in the foreign location. However, OHA doesn’t guarantee full reimbursement of rent for every service member. Maximum Rent Allowances, commonly referred to as “rent caps,” are established for each specific OCONUS location, varying by the service member’s pay grade and dependency status. These caps are determined by analyzing actual rent payment data reported by service members already receiving OHA in that particular area through their local finance systems.

The policy aims to set these maximum rental allowances at a level where approximately 80 percent of service members with dependents in that location and grade group have their reported rent fully reimbursed. This 80 percent target inherently means that about 20 percent of members with dependents might incur some out-of-pocket rent expenses if the cost of their chosen housing exceeds the established cap for their category. The system considers housing cost data from newly arriving personnel when making periodic adjustments to these rent caps.

The actual monthly Rent Allowance payment received by a service member is calculated as the lesser of two amounts:

• The member’s actual monthly rent as documented in their official lease agreement.
• The maximum rent allowance (cap) set for their specific pay grade, dependency status, and OCONUS duty location.

For service members without dependents, or those serving an unaccompanied tour who are authorized OHA or FSH-O, the maximum rent allowance is typically set at 90 percent of the with-dependent rate for their grade and location. Their reimbursement is still the lesser of their actual rent paid or this adjusted (90%) cap.

Special rules apply to homeowners. If a service member purchases a home at their OCONUS duty station, OHA regulations permit calculation of a monthly “rent” equivalent. This is generally determined by dividing the actual purchase price of the home (excluding certain costs like settlement fees) by 120, effectively amortizing the cost over 10 years. This calculated “rent” is then subject to the standard OHA rent cap for the member’s grade and dependency status. Homeowners remain ineligible for the MIHA/Rent component.

For situations involving multiple service members (or eligible DoD civilians receiving Living Quarters Allowance) sharing a single dwelling, the total monthly rent for the property is usually divided equally among the number of sharers. The resulting amount constitutes each individual’s “actual rent” for OHA calculation purposes. Each sharer’s rent allowance is then capped based on their individual pay grade and dependency status.

The philosophy behind the 80% rent cap target reflects a deliberate policy decision by the DoD. It aims to provide substantial assistance with housing costs but stops short of guaranteeing full reimbursement for all possible housing choices at every price point. By setting caps based on reported market data, the program encourages service members to seek housing that falls within the typical cost range for their location and peer group, thereby managing overall program expenditures. This contrasts with the BAH system, which provides a set allowance intended to cover costs for a “typical” property, granting members more latitude in their housing choices and potentially allowing savings.

Service members preparing for an OCONUS move must research the specific OHA rent caps for their prospective duty station before signing a lease. Utilizing the official OHA Calculator is crucial for this planning phase to understand potential out-of-pocket expenses and make informed housing decisions. Choosing housing significantly above the established cap will directly impact the service member’s personal budget.

Utility & Recurring Maintenance Allowance: Keeping the Lights On

The second component of OHA is the Utility/Recurring Maintenance Allowance. This is a fixed monthly payment intended to help defray the average costs associated with utilities (such as electricity, heating fuel, water, sewage, and trash collection) and expenses for recurring maintenance and minor repairs that the service member pays directly to providers or incurs for their leased residence.

Similar to the rent caps, the amount of this allowance is determined based on actual expense data collected through surveys from service members receiving OHA at that specific location who are responsible for their own utility payments. The allowance amount is set to cover the reported utility and maintenance costs for the 80th percentile of members with dependents in that area.

Service members without dependents (or on unaccompanied tours) who pay their own utilities receive a reduced rate, typically 75 percent of the established with-dependent utility allowance for their location.

An important rule applies when utilities are included as part of the monthly rent payment by the landlord. In such cases, the service member doesn’t receive the separate Utility/Recurring Maintenance Allowance payment. Instead, the value of the standard utility allowance for that location and status is effectively added to the member’s maximum rent allowance (rent cap) when calculating their reimbursement limit. The member is still only reimbursed for their actual rent paid (which includes utilities) up to this adjusted, higher rent cap, whichever amount is less. In some cases, utility point scores based on factors like local climate and housing type might be used to adjust the applicable percentage of the utility allowance.

The structure of the Utility Allowance presents a unique budgeting challenge. While the allowance is paid as a fixed amount each month, actual utility billing cycles in many overseas locations can be irregular. Bills might arrive infrequently – perhaps only once or twice a year – and can be significantly large when they do. This creates a potential mismatch between the steady monthly income from the allowance and the irregular, sometimes substantial, outflow for actual utility payments. Because the allowance is based on an 80th percentile average, some members might find their actual annual utility costs are less than the total allowance received.

To manage this effectively, financial experts strongly recommend establishing a separate bank account dedicated solely to receiving OHA funds (both rent and utility components) and paying housing-related bills. This practice allows the fixed monthly utility allowance to accumulate in the account over time, creating a necessary financial buffer to handle large, infrequent utility bills without causing budget stress. Any consistent surplus remaining from the utility allowance at the end of a tour could potentially be used for other savings goals, like preparing for the next Permanent Change of Station (PCS). Failing to segregate these funds and budget accordingly could lead to significant financial difficulty when large utility payments become due.

Move-In Housing Allowance (MIHA): Easing Your Transition

The third component, the Move-In Housing Allowance (MIHA), is designed to partially offset the various initial, one-time costs associated with making privately leased or owned quarters habitable upon first moving in at an OCONUS location. MIHA is explicitly not intended to cover costs associated with moving out of a residence at the end of a lease or tour.

MIHA itself isn’t a single payment but is composed of up to five distinct sub-components. Some are paid automatically as a lump sum, while others require specific claims with supporting documentation for reimbursement:

MIHA/Miscellaneous:

• Description: An upfront, lump-sum payment automatically included with the service member’s first OHA payment after establishing housing.
• Purpose: Aims to cover the average anticipated costs for making a dwelling habitable. Common examples include purchasing electrical transformers needed for US appliances (due to different voltages overseas), acquiring supplemental heating equipment if needed, buying wardrobes or closets (often not built-in OCONUS), and paying initial utility hook-up or connection fees.
• Calculation: The amount is a fixed sum determined for each location based on data collected from surveys conducted every three years. This fixed amount is paid in full to eligible members, regardless of whether they have dependents. No receipts or specific claims are needed to receive this component; it’s triggered by the approved OHA application (DD Form 2367).

MIHA/Rent:

• Description: This component provides a dollar-for-dollar reimbursement for certain specific, reasonable, fixed, one-time, non-refundable rent-related expenses levied by the landlord, agent, or a foreign government that must be paid before or upon occupying the dwelling.
• Covered Examples: Commonly includes payments for mandatory real estate agent or realtor fees, non-refundable redecoration fees required by the landlord prior to move-in, or certain one-time lease taxes imposed by the local government.
• Exclusions: Critically, MIHA/Rent doesn’t cover refundable security deposits, advance rental payments (money paid upfront for future rent periods), any recurring costs, or expenses that are deferred until the end of the lease. Service members who purchase their homes are ineligible for MIHA/Rent.
• Claim Process: Reimbursement requires the service member to submit DD Form 2556, Move-In Housing Allowance Claim, along with receipts or other documentation verifying the expense. Claims are subject to review and approval by the designated Authorizing Official (AO), who has the authority to disallow any expenses deemed unreasonable.

MIHA/Security:

• Description: Provides dollar-for-dollar reimbursement for the cost of necessary security-related enhancements made to the physical structure of the dwelling.
• Eligibility: Reimbursement under this component is restricted to service members assigned to specific OCONUS locations that have been officially designated by the DoD as MIHA/Security locations due to documented terrorist or significant criminal threats. A list of qualifying locations can be found in the DoD MIHA Process Guide.
• Covered Examples: Permissible items generally include physical security upgrades like reinforced security doors, bars or grilles for windows, upgraded locks, exterior security lighting, or professionally installed alarm systems. Expenses for personal security measures, such as hiring guards or purchasing guard dogs, are not covered.
• Claim Process: Requires submission of DD Form 2556 with receipts verifying the costs of the approved security enhancements.

MIHA/Infectious Disease:

• Description: Offers dollar-for-dollar reimbursement for specific dwelling upgrades necessary to mitigate exposure to certain infectious diseases.
• Eligibility: Similar to MIHA/Security, this is only available in locations officially designated as MIHA/Infectious Disease areas. The MIHA Process Guide lists these locations.
• Covered Examples: A primary example is the installation of window and door screens designed to reduce exposure to vector-borne diseases transmitted by insects, such as mosquitoes carrying the Zika virus.
• Claim Process: Requires submission of DD Form 2556 with receipts for the qualifying upgrades.

MIHA/Safety:

• Description: This component covers reasonable, actual expenses incurred for safety-related upgrades needed to bring a dwelling into compliance with specific safety standards, often referencing U.S. Department of State requirements (e.g., standards outlined in 15 Foreign Affairs Manual 971.1).
• Eligibility: Availability is limited to service members assigned to officially designated MIHA/Safety locations. Check the MIHA Process Guide for the current list.
• Claim Process: Requires submission of DD Form 2556 with receipts documenting the costs of the required safety upgrades.

For comprehensive details on all MIHA components, eligibility criteria, and claim procedures, service members should consult the DoD Move-In Housing Allowance Process Guide and the DoD Overseas Station and Housing Allowance Process Guide.

The multi-faceted nature of MIHA, with its mix of automatic payments and claim-based reimbursements tied to specific locations and expense types, requires proactive attention from service members. It’s easy to overlook potential reimbursements or misunderstand eligibility requirements during the stressful process of an overseas move.

Members cannot assume that all initial move-in costs will be covered automatically by MIHA/Miscellaneous. Careful planning during the house-hunting and lease negotiation phase is essential. This includes identifying potential expenses that might qualify under MIHA/Rent, Security, Infectious Disease, or Safety; checking the official MIHA Process Guide to confirm if the duty station is designated for these specific components; meticulously saving all relevant receipts and documentation; and promptly submitting DD Form 2556 for all claimable expenses. Relying solely on the automatic MIHA/Miscellaneous payment could lead to significant unexpected out-of-pocket costs for establishing a household overseas.

Table 1: Summary of Move-In Housing Allowance (MIHA) Components

Applying for OHA: Forms, Documentation, and Updates

Step-by-Step: Getting Your OHA Started

Initiating OHA payments involves a defined process that begins after a service member has secured authorized private-sector housing at their OCONUS duty station. The core of the process involves completing the required application form and submitting it, along with necessary supporting documents like the lease agreement, to the designated approval authority at the installation. This authority is often located within the installation’s housing office or finance office. Official approval of the application is required before OHA payments can commence.

Essential Forms: DD Form 2367 & DD Form 2556

Two primary forms are central to the OHA application and claims process:

1. DD Form 2367, Individual Overseas Housing Allowance (OHA) Report: This is the fundamental application document for receiving OHA. Service members must complete this form to report essential details about their housing situation, including the property address, monthly rent amount, and lease terms. Submitting an approved DD Form 2367 initiates the monthly Rent Allowance and Utility/Recurring Maintenance Allowance. It also serves as the trigger for receiving the automatic MIHA/Miscellaneous lump-sum payment. The official form can usually be obtained through command channels or official DoD forms websites.
2. DD Form 2556, Move-In Housing Allowance Claim: This form is used exclusively for claiming reimbursement for eligible expenses incurred under the MIHA/Rent, MIHA/Security, MIHA/Infectious Disease, and MIHA/Safety components. It requires the service member to itemize the specific costs being claimed and attach supporting documentation, such as receipts or invoices, as proof of payment. This form should only be completed and submitted if the member actually incurs expenses that fall under these specific, claimable MIHA categories. The official form is available at: https://www.esd.whs.mil/Portals/54/Documents/DD/forms/dd/dd2556.pdf.

Proof Positive: Your Lease and Other Required Documents

Supporting documentation is essential for processing OHA applications and claims. A complete, signed copy of the formal lease agreement for the private-sector housing must accompany the DD Form 2367 submission. This document serves as the primary verification of the actual rent amount being paid and the terms of occupancy.

For any claims submitted using DD Form 2556 for MIHA/Rent, Security, Infectious Disease, or Safety components, proof of the actual costs incurred is mandatory. This typically involves providing copies of receipts, paid invoices (e.g., for realtor fees or security system installation), or other official documents that clearly show the expense and that payment was made. For service members who own their OCONUS home, documentation verifying the actual purchase price (needed to calculate the OHA “rent” equivalent) must be provided.

Keeping it Current: Reporting Changes

OHA entitlements are based on the service member’s current housing and dependency situation. Therefore, it’s the member’s responsibility to promptly report any changes that could affect their OHA eligibility or payment amount. This is done by completing and submitting a new DD Form 2367 to the appropriate office.

Changes that must be reported include, but are not limited to:

• A change in the monthly rent amount (e.g., due to lease renewal).
• A change of residence (moving to a different private-sector dwelling).
• A change in dependency status (e.g., marriage, divorce, birth of a child, dependents arriving or departing the OCONUS location).
• Changes in housing sharing arrangements (e.g., another service member moving in or out).

Failure to report relevant changes in a timely and accurate manner can result in incorrect OHA payments (either overpayments or underpayments) and may lead to debt recoupment or other administrative or disciplinary actions.

Budgeting with OHA: What’s Covered, What’s Not

Effectively managing finances while stationed overseas requires a clear understanding of precisely which expenses OHA is designed to help cover, and equally importantly, which costs fall outside its scope.

Expenses OHA Typically Helps With:

The Overseas Housing Allowance program is structured to provide financial assistance for several key housing-related costs:

• Monthly Rent: Covers the actual cost of renting private accommodations, up to the maximum rent allowance (cap) established for the member’s location, rank, and dependency status.
• Utility Costs: Helps defray average expenses for essential utilities like electricity, water, heating fuel, sewage, and trash collection through the fixed monthly Utility/Recurring Maintenance allowance.
• Initial Habitability Costs: Assists with average initial expenses needed to make a dwelling livable, such as purchasing electrical transformers or wardrobes, via the automatic MIHA/Miscellaneous payment.
• Specific Move-In Expenses (Claim-Based): Reimburses documented costs for certain one-time move-in needs in designated locations, including realtor/agent fees (MIHA/Rent), necessary security upgrades (MIHA/Security), required infectious disease prevention measures (MIHA/Infectious Disease), or mandated safety improvements (MIHA/Safety).

Common Costs OHA Doesn’t Cover (Know the Limits):

OHA isn’t intended as a comprehensive payment for all possible housing-related expenditures. Budgeting must account for costs that fall outside the allowance’s purview. Common examples of expenses not typically covered by OHA include:

• Rent amounts that exceed the member’s authorized maximum rent allowance cap.
• Utility bills that significantly surpass the fixed monthly Utility/Recurring Maintenance allowance provided.
• Refundable security deposits required by landlords (these are expected to be returned, less damages, at lease end).
• Advance rent payments (paying for multiple months upfront), although specific rate protection rules may apply in certain countries during currency fluctuations.
• Costs associated with furnishing or decorating a home beyond basic habitability needs. For homeowners, loan amounts for purely aesthetic upgrades (like adding a swimming pool) cannot be included in the purchase price used for OHA calculation.
• Expenses related to moving out of a residence, such as professional cleaning fees or penalties for early lease termination. The MIHA/Miscellaneous component explicitly excludes move-out costs. (A specific exception exists for mandatory end-of-lease refurbishment costs required by law or custom in Denmark, which may be claimable as an OHA Unique Expense).
• Fees for parking at the service member’s duty location.
• Any costs incurred if the residence is used to accommodate renters or primarily for vacation purposes.
• Housing costs incurred while living with friends or relatives, even if a lease exists (MIHA and the utility allowance are generally not payable in these situations).
• Major home maintenance or repairs beyond the scope of minor, recurring upkeep intended to be offset by the Utility/Recurring Maintenance allowance.

OHA vs. BAH: Understanding the Key Differences

Although both OHA and the stateside Basic Allowance for Housing (BAH) aim to assist service members with housing costs, their fundamental structures and operational rules are significantly different. Misunderstanding these differences can lead to confusion and budgeting errors, especially for those transitioning between CONUS and OCONUS assignments.

Key distinctions include:

• Location: BAH is the primary housing allowance used within the 50 United States (CONUS). OHA is used for assignments to permanent duty stations in most overseas locations (OCONUS).
• Payment Nature: BAH is an allowance based on the median cost of suitable housing in a specific U.S. Military Housing Area (MHA). It’s paid as a flat rate based on location, rank, and dependency status, regardless of the member’s actual housing expenses. OHA is a cost-reimbursement system. Payments are directly tied to the member’s actual housing expenses (rent up to a cap, a fixed utility amount, and specific reimbursements for certain move-in costs).
• Potential Savings: Because BAH is a fixed allowance, service members who find housing costing less than their BAH rate can typically keep the difference (“pocket the savings”). OHA’s reimbursement structure generally prevents this, as payments are limited by actual costs or allowance caps.
• Structure: BAH generally combines rent and average utility costs into a single monthly allowance payment. OHA is broken down into three distinct components: Rent Allowance, Utility/Recurring Maintenance Allowance, and the various MIHA components for move-in costs.
• Currency Impact: BAH payments are made in U.S. dollars and are not affected by foreign currency exchange rates. OHA payments, while disbursed in U.S. dollars, are calculated based on expenses often incurred in foreign currency, making the final dollar amount received susceptible to fluctuations in exchange rates.
• Tax Status: Both BAH and OHA are generally considered non-taxable allowances by the IRS, meaning they’re excluded from the service member’s gross income for federal tax purposes.

Table 2: OHA vs. BAH Comparison

Your OHA Toolkit: Rates, Calculators, and Official Guidance

Navigating the OHA system requires access to accurate, up-to-date information and official resources. Fortunately, the DoD provides several tools and documents to assist service members.

Finding Current OHA Rates: The Official Calculator

OHA rates – including the maximum rent allowances (rent caps), the fixed Utility/Recurring Maintenance allowances, and the MIHA/Miscellaneous amounts – are specific to each OCONUS location and vary based on a service member’s pay grade and dependency status. These rates are subject to change due to periodic data collection and fluctuations in currency exchange rates.

The only authoritative source for determining the current, applicable OHA rates for any given location is the official OHA Calculator maintained by the Defense Travel Management Office (DTMO). Service members must use this tool to find the correct allowances for their situation. To use the calculator effectively, individuals will need to input:

• Their Permanent Duty Station (PDS) location (typically by selecting the country and then the specific city or military installation).
• Their current pay grade (e.g., E-5, O-3).
• Their dependency status (select “With Dependent” or “Without Dependent” based on command sponsorship and authorization).

The official OHA Calculator can be accessed directly through the DTMO website at: https://www.travel.dod.mil/Allowances/Overseas-Housing-Allowance/OHA-Rate-Lookup-DNN/. Bookmark this link and consult the calculator frequently, especially when planning a move or anticipating lease renewals.

Essential Reading: Links to Key DoD Guides

For those seeking comprehensive policy details, procedural guidance, or clarification on specific OHA rules, the following primary source documents are essential references:

• DoD Financial Management Regulation (FMR) 7000.14-R, Volume 7A, Chapter 26 (Housing Allowances): This is the ultimate governing document for all DoD housing allowance policies, including OHA. It contains the most detailed regulations and technical specifications. Access it here: https://comptroller.defense.gov/Portals/45/documents/fmr/current/07a/07a_26.pdf.
• DoD Overseas Station and Housing Allowance Process Guide: This guide provides valuable insights into how OHA rates are determined, including information on data collection surveys, the handling of OHA Unique Expenses, and the roles and responsibilities of personnel like the Country Allowance Coordinator. Find it here: https://media.defense.gov/2022/Jul/13/2003034513/-1/-1/0/DOD_OVERSEAS_STATION_AND_HOUSING_ALLOWANCE_PROCESS_GUIDE.PDF.
• DoD Move-In Housing Allowance (MIHA) Process Guide: This document focuses specifically on the MIHA components, detailing eligibility requirements, claim procedures, examples of covered expenses, and lists of designated locations for MIHA/Security, MIHA/Infectious Disease, and MIHA/Safety. This guide is typically linked from the main DTMO OHA page. Service members should look for it on the DTMO website: https://www.travel.dod.mil/Allowances/Overseas-Housing-Allowance/.
• OHA Fact Sheet: Offers a concise, easy-to-understand summary of the OHA program’s key features. Available here: https://media.defense.gov/2022/Nov/30/2003123604/-1/-1/0/OHA_FACT_SHEET.PDF.

Official OHA FAQs

The Defense Travel Management Office (DTMO) also maintains a dedicated Frequently Asked Questions (FAQ) section on its website specifically addressing common queries about Overseas Housing Allowance. This can be an excellent first stop for answers to straightforward questions about eligibility, components, or procedures. The OHA FAQs can typically be found on the main OHA program page: https://www.travel.dod.mil/Allowances/Overseas-Housing-Allowance/. Additionally, many local installation housing offices or command support staffs maintain their own FAQs tailored to the specific circumstances and procedures relevant to their geographic location.

Navigating OHA: Common Questions & Important Facts

Beyond the basic structure and application process, several key aspects and common questions frequently arise regarding OHA. Understanding these points is vital for smooth financial management during an OCONUS tour.

Good News: OHA is Generally Tax-Free

A significant financial benefit of OHA is its tax treatment. Similar to BAH, payments received under the OHA program – encompassing the Rent Allowance, the Utility/Recurring Maintenance Allowance, and all components of MIHA – are generally considered non-taxable allowances by the Internal Revenue Service (IRS) for federal income tax purposes. This means these amounts are typically excluded from the service member’s gross income and are not subject to federal income tax withholding. This tax-exempt status provides a considerable advantage compared to receiving an equivalent amount as taxable salary, effectively increasing the purchasing power of the allowance.

While the OHA allowance itself is tax-free, OCONUS homeowners receiving OHA who choose to itemize deductions on their federal tax return may still be eligible to deduct qualified mortgage interest and real estate taxes paid on their overseas property, even if OHA funds were used to make those payments. For authoritative guidance on military tax matters, consult IRS Publication 3, Armed Forces’ Tax Guide, or seek advice from a qualified tax professional experienced with military personnel issues.

The Currency Conundrum: How Exchange Rates Affect Your Allowance

One of the most critical and often confusing aspects of OHA is the impact of foreign currency exchange rates. While service members typically pay their rent, utilities, and many move-in costs in the local foreign currency of their host nation, their OHA payments are disbursed by the Defense Finance and Accounting Service (DFAS) in U.S. dollars.

The exchange rate used by DFAS to convert the calculated OHA entitlement (based on local currency costs or surveys) into U.S. dollars for payment can fluctuate. These adjustments can occur frequently, potentially impacting the dollar amount received in each paycheck. Consequently, the U.S. dollar amount deposited into a service member’s account can change from month to month, even if their actual rent in local currency and the underlying OHA allowance rates remain constant.

The DTMO continuously monitors official exchange rates and directs DFAS to adjust OHA payments accordingly to reflect current currency values. Service members can typically find the exchange rates being used for pay purposes referenced on the DTMO website or through the OHA Calculator tool. This inherent variability means service members bear some short-term risk related to currency fluctuations between when their allowance is calculated and paid in dollars, and when they must make payments in the local currency.

Furthermore, service members should anticipate potentially incurring small fees when converting their U.S. dollar funds into local currency at banks or exchange services to pay bills. Budgeting strategies that account for this variability, such as using an average exchange rate for planning or adjusting monthly based on the Leave and Earnings Statement (LES), are essential. In certain situations involving significant currency shifts, specific rate protection rules may apply to advance rent payments.

Behind the Rates: How OHA Adjusts Over Time (Surveys & Data)

OHA rates are not static figures; they’re dynamic and adjusted periodically based on comprehensive data collection efforts aimed at reflecting actual costs experienced by service members OCONUS.

• Rent Data: Information on actual monthly rent payments is continuously gathered as service members submit and update their DD Form 2367 through their local finance offices. This ongoing stream of real-world rent data is the primary driver for adjusting the maximum rent allowances (caps) for each location.
• Utility/Maintenance & MIHA/Miscellaneous Surveys: The fixed allowances for utilities/recurring maintenance and the MIHA/Miscellaneous component are determined through specific surveys administered periodically. Utility and maintenance expense data is typically collected annually, while MIHA/Miscellaneous move-in cost data is gathered roughly every three years. Participation in these surveys by eligible service members is crucial for ensuring the allowances accurately reflect current costs. The DoD Overseas Station and Housing Allowance Process Guide provides details on the survey schedules and methodologies. Personnel known as Country Allowance Coordinators play a key role in facilitating this data collection process within their assigned regions.
• Currency Adjustments: As previously discussed, OHA payments are also adjusted, often as frequently as every pay period, solely based on fluctuations in currency exchange rates to ensure the dollar amount paid reflects the current value of the allowance set in local currency terms.

Playing by the Rules: Consequences of Inaccurate Reporting (Fraud)

Maintaining accuracy and honesty when reporting housing information for OHA purposes is mandatory. Service members are responsible for ensuring the information provided on their DD Form 2367 (regarding rent amount, address, dependency status, sharing arrangements) and any claims submitted on DD Form 2556 (for MIHA components) is truthful and correct.

Intentionally providing false or misleading information – such as submitting a falsified lease with an inflated rent amount, falsely claiming dependents who are not authorized or residing at the location, misrepresenting marital status, or fabricating receipts for MIHA claims – in order to obtain higher OHA payments constitutes fraud. OHA funds are authorized solely for legitimate housing expenses and are not intended for personal financial gain, funding vacations, or subsidizing rental income from others.

Engaging in BAH or OHA fraud is a serious offense under military law and carries severe potential consequences:

• Recoupment of Funds: DFAS is obligated to recover any allowances paid improperly. In cases suspected of involving fraud, DFAS may invoke the “Tainted Claim” policy, seeking to recoup the entire amount of the allowance paid during the period the fraudulent information was used, not just the difference or overpayment. This can lead to service members facing substantial debts owed back to the government, sometimes totaling tens or even hundreds of thousands of dollars.
• Uniform Code of Military Justice (UCMJ) Action: Fraudulent claims can result in disciplinary proceedings under the UCMJ. Depending on the severity and circumstances, this could range from non-judicial punishment (NJP, also known as Article 15) to trial by court-martial. Potential charges often include Larceny (Article 121, UCMJ – theft of government funds) and Making False Official Statements (Article 107, UCMJ). Conviction at court-martial can lead to serious penalties, including reduction in rank, forfeiture of pay and allowances, confinement, and punitive discharges (Bad Conduct Discharge or Dishonorable Discharge), which have lifelong consequences.
• Administrative Penalties: Beyond financial recoupment and UCMJ action, OHA fraud can trigger adverse administrative consequences. These may include negative performance evaluations, administrative reprimands (like a General Officer Memorandum of Reprimand, or GOMOR), placement of unfavorable information in official personnel files, suspension or revocation of security clearances, and significant damage to a service member’s career prospects.

The complexity of the OHA system itself – with its multiple components, varying rates, location-specific rules, dependency considerations, and currency adjustments – can unfortunately increase the risk of errors, even unintentional ones. An honest mistake in reporting could still lead to an overpayment and subsequent recoupment action. Given these complexities and the severe consequences of misreporting (whether intentional or not), exercise diligence.

This includes actively seeking clarification from official sources like the housing office or finance office when unsure about rules, meticulously documenting all housing-related paperwork (leases, OHA forms, receipts, LES copies), and retaining records of any guidance received. Understanding the gravity of accurate reporting is paramount for financial security and career protection during an OCONUS assignment.

Budgeting Strategies for OHA’s Unique Challenges

Successfully managing personal finances while receiving OHA requires adapting budgeting strategies to account for its unique characteristics, particularly its cost-reimbursement nature and susceptibility to currency fluctuations. Standard stateside budgeting methods used with BAH may not be sufficient. Key strategies include:

• Establish a Dedicated Housing Account: Open a separate checking or savings account used exclusively for receiving OHA deposits and paying all rent and utility bills. This prevents OHA funds from being inadvertently spent on other things and makes it much easier to track housing expenses against the allowance received.
• Monitor Actual Spending: Keep close track of actual monthly rent payments and all utility expenditures. Compare these actual costs against the OHA amounts being received.
• Build a Utility Buffer: Since the Utility/Maintenance allowance is paid monthly but bills may arrive infrequently, allow the utility portion of the OHA deposit to accumulate in the dedicated housing account. This creates a reserve fund specifically to cover large utility bills when they become due.
• Account for Currency Variations: Regularly check the official OHA Calculator to understand potential fluctuations in the U.S. dollar payment amount due to exchange rates. Decide on a budgeting approach: either use an estimated average exchange rate for planning purposes or manually adjust the budget each month based on the actual OHA dollar amount shown on the LES.
• Budget for Uncovered Costs: Explicitly plan and budget for housing-related expenses that OHA doesn’t cover, such as rent exceeding the cap, refundable security deposits, non-MIHA eligible move-in costs, furnishings, and potential move-out expenses.
• Seek Financial Counseling: Take advantage of free financial counseling services available through installation resources like the Military and Family Support Center or programs like Military OneSource. Counselors can provide personalized assistance in developing an effective OCONUS budget that incorporates OHA specifics.

Special Situations: Dual Military, Homeowners, Unique Expenses

Certain circumstances trigger specific OHA rules:

Dual Military Couples: When both spouses are service members assigned OCONUS, specific regulations govern their housing allowances. If residing together in private housing, typically only one OHA entitlement is authorized for the couple, usually calculated based on the senior member’s pay grade. If the members are required by orders to live separately (e.g., assigned to different locations), they might each be entitled to OHA based on their individual circumstances. The rules for dual-military couples can be intricate, so consulting the FMR Volume 7A, Chapter 26 and seeking definitive guidance from the local finance or housing office is essential.

Homeowners: As previously noted, service members who purchase a home at their OCONUS duty station are eligible to receive OHA. The “rent” component is based on a calculation derived from the home’s purchase price (purchase price divided by 120), subject to the standard rent cap for their grade and dependency status. They receive the applicable Utility/Recurring Maintenance allowance. However, homeowners are explicitly ineligible for the MIHA/Rent component.

OHA Unique Expenses: In a limited number of designated OCONUS locations identified as having unusually high mandatory housing-related costs not typically found in CONUS, service members may be eligible for reimbursement of specific “Unique Expenses.” These are paid on a dollar-for-dollar reimbursement basis and require submission of receipts to the finance office. Examples cited in regulations include a mandatory Habitation Tax in France and mandatory costs associated with completely refurbishing quarters upon departure in Denmark. A list of authorized locations and covered expenses can be found in the FMR (Vol 7A, Ch 26) and the DoD Overseas Station and Housing Allowance Process Guide.

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