Request for Reimbursement of Real Estate Expense Involving Loan Commitment Fee

An authorized certifying officer requested a determination as to whether a loan commitment fee paid by an employee on the purchase of a residence incident to a transfer may be reimbursed. The employee submitted a voucher claiming reimbursement of a commitment fee which he paid to the lending institution in connection with the purchase of a home. The loan disclosure statement showed that no loan origination fee was charged to the buyer. The employee asserted that the lending institution stated that the fee was not a finance charge, and that since the Internal Revenue Service does not allow a deduction of this item as an interest expense under the tax code, it should be reimbursable to him as a miscellaneous expense incident to his transfer. Federal Travel Regulations (FTR) provide that no fee, cost, charge, or expense is reimbursable which is determined to be a part of the finance charge under the Truth in Lending Act. GAO held that the commitment fee claimed by the employee related to the processing and handling of his loan. Such a fee may be described as a loan fee within the meaning of the Truth in Lending Act, and no exception for loan fees is contained in the Act. Thus, since the commitment fee was a finance charge under the Act and since FTR precludes reimbursement for such finance charges, reimbursement was not allowed for the commitment fee paid by the employee. Accordingly, the voucher was not certified for payment.