Real Estate Expense Claim

A decision was requested concerning a claim for reimbursement for certain expenses included as part of a finance charge and incurred incident to the purchase of a residence at an employee's new duty station. The claimed amount was determined by using estimates of customary local charges for these services. The agency had disallowed the claim because there was no itemization of the charges allocable to the services for which reimbursement was being sought. In this case, the financial institution refused to provide such itemization, was not legally required to do so, and was following a trend among financial institutions in not doing so. Because of this trend and the availability of estimates, the agency asked GAO to reconsider its position denying transferred Federal employees reimbursement for services provided as part of a finance charge where there is no itemization of the portion of the charge allocable to each of the services. GAO concluded that the employee's claim was properly disallowed. Fees such as those claimed by the employee may be reimbursed as part of a loan origination fee only if the charges are expressly excluded from the finance charge, are reasonable, and are itemized. Because regulations prohibit reimbursement of a finance charge and require that a determination be made of the reasonableness of each charge, GAO has held that estimates are not acceptable and an itemization must be provided. In the absence of such an itemization of the fee, GAO found no basis to allow for payment of the employee's claim.