[Entitlement to Real Estate Expenses]

The Department of Housing and Urban Development (HUD) requested a decision as to whether it may reimburse an employee for certain real estate expenses incurred when he purchased a residence after his transfer to a new duty station. The employee submitted a claim for a $3,950 loan origination fee. The agency determined that this was excessive and limited reimbursement to $1,100. GAO found that: (1) the employee had included as part of the loan origination fee other charges assessed by his lending institution; (2) the rate buydown fee was a nonreimbursable mortgage discount; (3) the document preparation fee was a reimbursable conveyance preparation cost; and (4) the customary local loan origination fee was 1 percent. Accordingly, the employee may be reimbursed for the document preparation fee in addition to the amount already paid for his loan origination fee.