Military Banking Rates

BRAC: Creating New Opportunities in Military Communities


Posted in Mortgage Rates, Articles

Base Realignment and Closure

Struggles to set and control the federal budget are not new issues in America. Congress and the White House regularly look for ways to reduce spending throughout the federal government, and the Department of Defense is a frequent target for those looking to cut costs. The Base Realignment and Closure (BRAC) process is one of those attempts to cut costs within the Armed Forces.

BRAC has many effects on the military, but one of its primary results is the substantial relocation and stability of families as some military installations expand and others shut down. Therefore, BRAC, coupled with falling mortgage rates, may create the perfect opportunity to achieve the American Dream for the military community.

BRAC: Bringing Changes to Military Life

In 1988, Congress created the BRAC process to reduce defense spending and increase efficiency in the Armed Forces by closing excess military installations and realigning existing installations. Since its creation, Congress initiated five rounds of the BRAC process, and the result has been massive shifts in military personnel and government employees.

While these shifts create large movements of military families from one installation to another, home purchasing and selling remained level because the families typically weren’t leaving homes they owned and the incoming families weren’t looking to buy a home. The military community has historically been a renting community because they know they will be moving their family with some frequency.

The latest round of BRAC proceedings, which concluded in 2005 and took effect in 2011, signaled changes to this trend as the military promised less movement for military families. Permanent Change of Station (PCS) orders were extended from two to three years to six to eight years. As a result, home purchasing not only became possible, it became a wise financial decision. After the financial crisis of 2008, mortgage rates began a steady decline and currently hover around historical lows. With mortgages being the most affordable in history, military families are in the perfect position to achieve the American Dream.

Down Payment Assistance Grants for Military Homebuyers

Despite historically low mortgage rates, homeownership may be still just out of reach for many service members. Stricter lending guidelines have forced many borrowers to come up with a significant down payment, which remains difficult to save for with a tight budget.

Related: Tips for Veteran First Time Home Buyers

The PenFed Foundation developed the Dream Makers program to offer grants of up to $5,000 for first-time homebuyers of modest means that serve in defense of our country. Active and veteran military personnel, as well as current employees of the Department of Defense and Department of Homeland Security, are eligible for grants, and borrowers can use any lender for their mortgage. Now has never been a better time for our nation’s military families to own a home, thanks to fewer moves and low mortgage rates. It is important that our military members and veterans have the financial resources and education they need to make homeownership a reality.

This post was contributed by Daniel Schenk, the Program Specialist at the PenFed Foundation.

About the Pentagon Federal Credit Union Foundation (PenFed Foundation)

The PenFed Foundation is a nationally recognized nonprofit organization working to meet the unmet needs of military personnel and their families through supporting wounded soldiers, providing financial management assistance and home ownership aid. The foundation is also the primary sponsor of the new $11 million Defenders Lodge supported by donated land from the government and financed entirely through private donations. The Pentagon Federal Credit Union covers all labor expenses for the foundation so every dollar donated goes directly to supporting its programs. For more information on the PenFed Foundation and ARK program, visit