[Claim for Real Estate Expenses]

B-218946: Nov 12, 1985

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The Fish and Wildlife Service requested a decision concerning an employee's claim for reimbursement for a loan fee which he characterized as a loan origination fee. The employee purchased a new residence and obtained financing through a mortgage loan purchase agreement with a local housing finance authority. The agency had reimbursed the employee for a loan origination fee but had disallowed reimbursement for the additional fee because it considered it to be a loan discount, which is not reimbursable. The employee contended that: (1) the additional fee should be regarded as a loan origination fee because it was characterized as such in letters from the housing finance authority and the Department of Housing and Urban Development; (2) a different bank would have charged him a loan origination fee totalling more than the two fees he claimed; and (3) he paid the fee to the seller because the agency had advised him that the fee would be reimbursable. GAO determined that: (1) the statement from a different lending institution that it would have charged the employee a higher loan origination fee did not have any bearing on the nature or purpose of the additional fee; and (2) it was not material that the employee had relied on the agency's erroneous advice. Accordingly, because the record showed that the additional fee constituted a nonreimbursable loan discount, the agency determination was sustained.

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