[Variable Housing Allowance: Allowable Expenses for Offset]

The Department of Defense (DOD) requested an advance decision regarding inclusion of certain costs in computing military service members' variable housing allowances. GAO held that the regulations' definition of monthly housing costs for the purpose of computing a variable housing allowance excluded the: (1) cost of a second mortgage a member took to satisfy a community property settlement, since it did not involve repairing, renovating, or enlarging his residence; and (2) interest or other return on investment a member lost in using personal funds to purchase a residence. Accordingly, DOD should not include these costs in computing the allowance.