How Much House Can I Afford on BAH? Norfolk & VB (2027)

On the 2026 Basic Allowance for Housing for the Norfolk/Portsmouth area (MHA VA298), an E-5 with dependents receives $2,430 a month. With no down payment on a VA loan, the 2.15% first-use funding fee financed, and the Freddie Mac 30-year fixed average of 7.24% (October 29, 2026), that amount covers principal, interest and real estate tax on a home of about $304,000 in Norfolk or $313,000 in Virginia Beach, before homeowners insurance. The median sold price in September 2026 was $331,000 in Norfolk and $442,500 in Virginia Beach (VaHome analysis of REIN MLS data, September 2026). Your actual approval can be higher or lower, because lenders treat BAH as part of your income, not as a price cap.

How BAH Counts Toward a Mortgage

BAH is set by your pay grade, your dependency status and the ZIP code of your permanent duty station, not the address of the home you buy. Norfolk, Virginia Beach, Chesapeake, Portsmouth and Suffolk all sit in the same Military Housing Area, VA298, so your BAH is the same whichever of those cities you buy in. BAH is also excluded from federal taxable income (IRS Publication 3, 2025 edition), which matters when a lender calculates your ratios.

2026 BAH rates for Norfolk/Portsmouth (VA298)

Pay grade	With dependents	Without dependents
E-1 to E-4	$2,229	$1,707
E-5	$2,430	$1,908
E-6	$2,559	$2,043
E-7	$2,604	$2,235
E-8	$2,661	$2,463
E-9	$2,796	$2,487
W-2	$2,628	$2,460
O-1	$2,454	$2,022
O-2	$2,556	$2,367
O-3	$2,694	$2,505
O-4	$3,054	$2,601
O-5	$3,318	$2,625

Monthly amounts, calendar year 2026, from the DTMO BAH Rate Lookup. Every grade, including W-1 to W-5 and O-1E to O-3E, is in the Hampton Roads BAH calculator, and each grade has its own page, such as E-5 BAH in the Norfolk MHA.

The 28/36 Rule

The 28/36 rule is a budgeting rule of thumb: keep the housing payment (principal, interest, taxes and insurance) under 28% of gross monthly income and all debt payments under 36%. It is not a loan rule. Fannie Mae's maximum total debt-to-income ratio is 36% for manually underwritten loans and 50% for loans run through its Desktop Underwriter system (Selling Guide B3-6-02). VA loans use their own two tests, below.

VA Loans and BAH

The VA's underwriting rule (38 CFR 36.4340) looks at two numbers:

• Debt-to-income ratio. 41% is the benchmark. A loan above 41% can still be approved with written justification, and that extra review is not required when residual income beats the guideline by at least 20%.
• Residual income. This is the money left each month after taxes, the full house payment (including estimated maintenance and utilities) and other monthly debts. Virginia is in the VA's South region, where the guideline for a loan of $80,000 or more is $1,003 a month for a household of four and $738 for a household of two. For active-duty borrowers who will keep using facilities on a nearby base, the guideline is reduced by at least 5%, so about $953 for a household of four.
• Tax-free income. Because BAH is not taxed, a lender may "gross it up" when calculating the debt-to-income ratio. Residual income must use your actual income.
• Proof that BAH will continue. The rule says a housing allowance counts as continuing income only with documentation that you are authorized to live off base. Your lender will tell you what it needs, usually built around your orders and Leave and Earnings Statement.

Other VA terms that change the math, from VA.gov as of October 29, 2026:

• No down payment as long as the price is not above the appraised value, and no private mortgage insurance (VA purchase loans).
• Funding fee on a purchase: 2.15% of the loan on first use with less than 5% down, 3.3% on later use with less than 5% down, 1.5% with 5% down and 1.25% with 10% down. It is waived for borrowers who receive VA disability compensation and for active-duty members who show evidence of a Purple Heart, among other exemptions (VA funding fee, rates effective April 7, 2023).
• Loan limits. With full entitlement, there is no VA county limit; the lender decides how much to lend. With entitlement already tied up in another VA loan, the remaining entitlement is based on the FHFA one-unit conforming limit, which is $832,750 for 2026 in Norfolk, Virginia Beach, Chesapeake, Portsmouth and Suffolk (VA loan limits; FHFA, November 25, 2025). FHFA usually announces the 2027 limit in late November.

Tom & Dariya Milan, Realtors, work with local VA loan lenders to make sure your BAH is counted correctly in your pre-approval. For the full process, see how to buy a house in Hampton Roads with a VA loan.

What your BAH covers at today's rates

The price at which principal, interest and real estate tax equal your monthly BAH. A starting point, not a loan approval.

2026 BAH (VA298)	Monthly BAH	Norfolk price	Virginia Beach price
E-4 without dependents	$1,707	about $214,000	about $220,000
E-4 with dependents	$2,229	about $279,000	about $287,000
E-5 with dependents	$2,430	about $304,000	about $313,000
E-6 with dependents	$2,559	about $320,000	about $329,000
E-7 with dependents	$2,604	about $326,000	about $335,000
O-3 with dependents	$2,694	about $337,000	about $347,000
O-4 with dependents	$3,054	about $382,000	about $393,000

Assumptions: 30-year fixed at 7.24%, the Freddie Mac PMMS average for the week of October 29, 2026 (a year earlier it was 6.17%); zero down; the 2.15% first-use funding fee added to the loan; real estate tax at the FY 2026-27 rate of $1.23 per $100 in Norfolk and $0.97 in Virginia Beach, with the assessment equal to the price. PMMS tracks conventional loans with 20% down and strong credit, so a VA rate quote can be higher or lower.

What moves the number:

• Insurance and fees. Every $100 a month of homeowners insurance, HOA or condo fees, or flood insurance lowers the price your BAH covers by about $12,500 in Norfolk and $12,900 in Virginia Beach.
• Rate. At 6.24%, one point lower, the E-5 figure in Norfolk rises to about $332,500.
• Funding fee exemption. If you are exempt, the loan is 2.15% smaller and the price your BAH covers rises a little.
• Other income and debts. Base pay and a spouse's income can raise your approval well above your BAH; car and card payments lower it.

Norfolk: Prices, Taxes and Location

In September 2026, 245 homes closed in Norfolk at a median price of $331,000, or $214 per square foot, with a median 21 days on market. There were 620 homes for sale, about 2.5 months of supply. Monthly medians from March to September 2026 ranged from $315,000 to $340,000 (VaHome analysis of REIN MLS data, September 2026; see the Norfolk housing market report).

Norfolk's real estate tax rate is $1.23 per $100 of assessed value for FY 2026-27, so a $300,000 assessment comes to about $3,690 a year. Parcels in the Downtown Improvement District pay an extra levy, and the city reassesses every year. Look up any address on the Norfolk property search page.

Commute and Location

Norfolk is home to Naval Station Norfolk and sits in the middle of the Southside, with I-64, I-264 and I-564 running through it. Drive times depend on the base and any bridge or tunnel on the route, so check rush-hour times from a specific address. Browse Norfolk homes for sale, or the full map of Hampton Roads homes for sale.

Virginia Beach: Prices, Taxes and Location

In September 2026, 502 homes closed in Virginia Beach at a median price of $442,500, or $251 per square foot, with a median 17 days on market. There were 1,076 homes for sale, about 2.1 months of supply. Monthly medians from March to September 2026 ranged from $407,945 to $448,000 (VaHome analysis of REIN MLS data, September 2026; see the Virginia Beach housing market report). At the median, principal, interest and tax on a zero-down VA loan with the funding fee financed come to about $3,440 a month at 7.24%, before insurance.

Virginia Beach is home to NAS Oceana, Dam Neck Annex and Joint Expeditionary Base Little Creek-Fort Story. Because it is in the same housing area as Norfolk, your BAH does not change if you buy here instead. Browse Virginia Beach homes for sale.

Cost of Living Considerations

Virginia Beach's real estate tax rate is $0.97 per $100 for FY 2026-27, the lowest of the five VA298 cities, so a $300,000 assessment comes to about $2,910 a year. Bills are due December 5 and June 5. Some areas, including Sandbridge and the Central Business District South at Town Center, are special service districts with their own rates (Virginia Beach property search and tax facts). Insurance is the other variable: if a home is in a FEMA Special Flood Hazard Area, a federally backed lender will require flood insurance, so check the flood zone and get quotes before you commit (FEMA FloodSmart).

Other Cities on the Same BAH

Chesapeake, Portsmouth and Suffolk are also in VA298, so the same BAH applies. In September 2026 the median sold price was $410,000 in Chesapeake, $289,500 in Portsmouth and $395,000 in Suffolk (VaHome analysis of REIN MLS data, September 2026). FY 2026-27 tax rates are $1.01 per $100 in Chesapeake (including the mosquito-control levy) and $1.24 in Portsmouth. Using the same assumptions as above, an E-5 with dependents covers principal, interest and tax up to about $311,000 in Chesapeake and $304,000 in Portsmouth.

Newport News

Newport News is on the Peninsula, which is a different Military Housing Area (VA297, Hampton/Newport News). BAH there is set for that area and is tied to your duty station, so buying in Newport News does not change your BAH if you are stationed on the Southside. If your orders are to a Peninsula installation, look up your rate under your duty station ZIP and compare Newport News homes for sale.

Norfolk vs. Virginia Beach Comparison

The key numbers side by side.

Feature	Norfolk	Virginia Beach
Median sold price (Sep 2026)	$331,000	$442,500
Median price per sq ft (Sep 2026)	$214	$251
Median days on market (Sep 2026)	21	17
Real estate tax rate (FY 2026-27)	$1.23 per $100	$0.97 per $100
Tax on a $300,000 assessment	About $3,690 a year	About $2,910 a year
BAH housing area	VA298 Norfolk/Portsmouth	VA298 Norfolk/Portsmouth
E-5 with dependents, price BAH covers*	About $304,000	About $313,000

Market figures: VaHome analysis of REIN MLS data, September 2026 (medians of closed residential sales). Tax rates from each city for FY 2026-27. *Principal, interest and tax only, at 7.24% (Freddie Mac PMMS, October 29, 2026) with zero down and the 2.15% funding fee financed; insurance and any HOA fee are extra. Prices vary by neighborhood, condition and home type.

Comparing lower-priced areas? See where BAH goes further in Hampton Roads.

Key Takeaways

• BAH is income, not a loan limit. Your approval depends on your total income, your debts, the VA's 41% debt-to-income benchmark and its residual income test.
• Your BAH is the same in Norfolk, Virginia Beach, Chesapeake, Portsmouth and Suffolk, because all five are in VA298.
• At 7.24% and the 2026 rates, an E-5 with dependents covers principal, interest and tax on about $304,000 in Norfolk and $313,000 in Virginia Beach. Insurance comes on top.
• 2027 BAH rates and the 2027 FHFA loan limit are not out yet. Recheck the numbers when they are released.

Frequently Asked Questions

Does BAH count as income for a mortgage?

Yes, once the lender has documentation that it will continue. Because it is tax-free, a VA lender may gross it up when calculating your debt-to-income ratio. Your other income, debts, credit and residual income also count.

Can I use BAH for a down payment?

BAH is monthly income, not a lump sum, so you cannot use a future month's BAH as a down payment. You can save part of it to build a down payment or closing-cost fund. A VA loan requires no down payment as long as the price is not above the appraised value.

Which city is cheaper, Norfolk or Virginia Beach?

On price, Norfolk. Its median sold price in September 2026 was $331,000, against $442,500 in Virginia Beach (VaHome analysis of REIN MLS data, September 2026). Virginia Beach has the lower tax rate, $0.97 per $100 versus $1.23 in Norfolk for FY 2026-27, which narrows the gap in the monthly payment at the same price.

Is BAH the same in Norfolk and Virginia Beach?

Yes. Both are in VA298, along with Chesapeake, Portsmouth and Suffolk. BAH follows your duty station, not where you buy.

How do I find homes that fit my BAH?

Use the VaHome.com map search to filter listings by price, then set up a saved search alert to be notified when new homes in your range are listed. Listings are synced from REIN MLS every 2 minutes.

What is the 28/36 rule?

A budgeting guideline: housing payment under 28% of gross income, all debt payments under 36%. Loan programs set their own limits, such as the VA's 41% benchmark plus its residual income test.

Are VA loans available in Hampton Roads?

Yes. VA loans are made by private lenders and are widely available across Hampton Roads; see our guide to Hampton Roads neighborhoods near the bases and our military relocation resources. Tom & Dariya Milan, Realtors, can connect you with experienced VA loan specialists.

How often do BAH rates change?

Once a year. The 2026 rates were released December 11, 2025 and took effect January 1, 2026. The 2027 rates are expected in December 2026. If the rate for your area drops, you keep your current rate as long as you stay at that duty station with uninterrupted BAH eligibility. Check the official rate in the DTMO BAH Rate Lookup.

Next Steps

Look up your 2026 rate in the BAH calculator, then get a VA pre-approval so a lender can apply your full income, debts and residual income to a real number. When the 2027 BAH rates come out in December, rerun the math before you make an offer.

Disclaimer: Tom & Dariya Milan, Realtors. Brokered by LPT Realty. Licensed real estate agents in Virginia. 249 Central Park Ave, Ste 300-220, Virginia Beach, VA 23462. (757) 777-7577. VaHome.com. Equal Housing Opportunity. Listing data comes from the REIN MLS and is deemed reliable but not guaranteed; prices and availability can change.