Request for Reimbursement of Finance Charges

An advance decision was requested on a reclaim voucher for certain expenses incurred by an employee incident to the purchase of a residence upon relocation. In reimbursing the employee for expenses incurred in connection with the purchase of a home, the certifying officer deducted an amount charged by the lender as a loan origination fee. The employee contended that this was not a loan origination fee as none could be charged in connection with a Veterans Administration (VA) secured loan. Therefore, he contended that the amount was a reimbursable item of real estate expenses. Regulations specifically preclude reimbursement of any finance charge, and GAO has consistently held that a fee in the nature of a loan origination fee is a finance charge. VA does permit a lender to charge a loan origination fee. Accordingly, reimbursement of the fee was proscribed by Federal regulations as it was a finance charge.