Army Advantage Fund Targets Future Homeowners, Business Owners

Men and women who have considered joining the Army may get the extra incentive they need to follow through: a benefit of up to $40,000 towards purchasing a …

Men and women who have considered joining the Army may get the extra incentive they need to follow through: a benefit of up to $40,000 towards purchasing a home or starting a small business through a new program, the Army Advantage Fund (AAF). The AAF is a program designed as part of a larger initiative to address the challenges the Army faces in meeting its recruiting goals. The AAF pilot launches this month.

“Recruiting is very difficult right now,” Douglas Smith, spokesperson for U.S. Army recruiting command, said. “[With the] ongoing war on terrorism [and] deployments in Iraq and Afghanistan, potential applicants and…their immediate family members may be concerned about the element of risk of enlisting…at this time.”

Additionally, competition for quality men and women has intensified as a result of the high volume of college-bound students and an improving civilian job market, Smith said.

The program will be made available to new recruits for the regular Army and the Army Reserve in five recruiting battalion areas–Albany, N.Y., Cleveland, Montgomery, Ala., San Antonio and Seattle–for at least six months. If the trial run proves to be effective, the program may be extended nationwide, Smith said.

Payout levels for new recruits depend on which of the two organizations they join and the length of their term of service. For the regular Army, an enlistment period of three years will fetch a $25,000 benefit, four years will fetch $35,000 and five or more years will fetch the maximum amount of $40,000. For the Army Reserve, payout levels are $10,000, $15,000 and a maximum of $20,000 for three, four and five or more years, respectively.

In order to be eligible for the fund, new recruits must have no prior military service experience and must sign up for at least three years of service. Additionally, they must place above a minimum score category on the military aptitude test. A limited selection of Military Occupational Specialties is eligible for the fund during the test phase and beyond, and is subject to change.

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“A local recruiter will have the most current information,” Smith said.

Although the AAF is only offered in five recruiting battalion areas, individuals from other parts of the country are eligible to join at any of those locations, Smith said.

A lump sum payment from the fund is provided once the Army soldier has completed their term of service or is separated by honorable discharge and it is verified that he or she has met all the program requirements.

A soldier’s spouse is alternatively eligible to receive AAF funds after the soldier completes his or her term of service or has been discharged for at least five years, Smith said.

Soldiers who wish to use the benefit to start a small business must provide a business tax number and a business plan through the Small Business Administration before receiving the funds. Additionally, army-enlisted members who remain on active duty after their term of service must wait until they leave active duty to receive money for a small business.

Soldiers who intend to put the money towards a home purchase must show proof of owning or buying a home. The AAF does not place restrictions on the purpose of the home purchase–the money can be used for a primary residence or property investment.

“The intent is for the soldier to utilize the money under the home ownership option for their primary residence,” Smith said. “However, they are free to utilize the fund for a house as an investment purpose if they so choose.”

The timing of the home ownership option appears fortuitous in light of tough lending conditions in the homebuyers market. The lure of a sizeable down payment towards a new home can be particularly effective now that lenders have tightened their underwriting criteria, Smith said.

“This program’s been in development for quite a few years,” Smith said. “It’s interesting that the home-buying environment has changed during the course of this [program’s development] and it works out.”


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