Officials have begun evaluating claims under the expanded Homeowners Assistance Program for military homeowners caught in the housing crisis, now that the Defense Department has issued its eligibility rules.

But because of limited funds, officials expect to cut off benefits Dec. 31 for homeowners affected by permanent change-of-station moves, one of the new groups covered under the expanded program. The law had authorized defense officials to run that program through Sept. 30, 2012.

Those who get PCS orders by Dec. 31 will be eligible if they meet other requirements, and they must submit the application by March 31, 2010. The program applies retroactively to those who received PCS orders on or after Feb. 1, 2006.

Mike McCord, Defense Department deputy comptroller said an estimated 10,000 homeowners will be eligible.

The first priority for the $555 million program will be wounded warriors who relocate for medical treatment or medical retirement due to disability, and surviving spouses of those killed in the line of duty. Their benefits will be retroactive to September 11, 2001, and will be permanent for those affected in the future.

According to the Pentagon rules, the government will reimburse eligible homeowners for losses incurred when selling their houses, or will buy houses of those who have been unable to sell.

Officials added one group not included in the law: Coast Guard members who make PCS moves.

• Homeowners must have lost at least 10 percent between the purchase price and sale price of the home, and the home must be in an area that suffered at least a 10 percent decline in housing prices.

• The home’s value must not exceed a cap that ranges between $417,000 and $729,750, depending on location.

• The move must be farther than 50 miles.

• Homeowners under PCS orders or affected by base realignment and closure actions must have purchased the homes before July 1, 2006.

• BRAC homeowners must sell their houses, on the local market or to the government, by Sept. 30, 2012.

How reimbursement will work:

• Wounded warriors, wounded defense or Coast Guard civilians and surviving spouses would receive a cash payment for the difference between their home’s sale price and 95 percent of its prior fair-market value.

• Those in communities where it is proven that the market declined because of a BRAC announcement would receive 95 percent of the home’s prior fair-market value.

• Other BRAC and PCS homeowners would receive up to 90 percent of the home’s prior fair-market value.

Circumstances under which the government will buy the home or pay off the mortgage:

• The government will buy the home only if the homeowner can’t sell it after 120 days on the market at a price deemed appropriate by the Army Corps of Engineers.

• Wounded warriors, wounded defense and Coast Guard civilians and surviving spouses unable to sell their homes will be able to sell to the government for 90 percent of the home’s prior fair-market value.

• For BRAC and PCS homeowners, the government would pay 75 percent of the home’s prior fair-market value.

It is unclear when officials will begin processing payments and buying houses. The regulations are subject to the federal rule-making process, which includes publication in the Federal Register and a comment period.

Kevin J. Lawson