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Request for Decision Concerning Reimbursement of Real Estate Expenses

B-201899 Aug 12, 1981
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Highlights

GAO was asked for a decision concerning whether a Federal employee may be reimbursed for costs incurred in obtaining a second mortgage at his old residence in order to purchase a new residence at his new official duty station. GAO has held that expenses incurred in connection with the negotiation of a second mortgage, if otherwise proper, are reimbursable to the same extent as expenses incurred in connection with first mortgages, provided such charges do not exceed the customary costs in the locality involved, are reasonable, and do not compensate the lender for the high risk involved. GAO did not find this transaction extraordinary or unusual in light of the present real estate climate. The second mortgage transaction on the old residence was essential for the purchase of the new residence. Accordingly, the claimed real estate expenses could be certified for payment, if otherwise proper.

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