Eligibility for Reimbursement of Real Estate Expenses

A decision was requested regarding the claims of two employees for reimbursement of real estate expenses related to second deeds of trust which were incurred incident to their transfers to new duty stations. Where the employee sold his residence and incurred an expense for prepaying a second deed of trust incurred after the initial financing of the house, the expenses were allowable since applicable statutes and regulations did not preclude reimbursement of expenses connected with second mortgage transactions. Although the Federal Housing Administration's (FHA's) Schedule of Closing Costs for Virginia did not list charges related to second mortgage transactions, the omission did not preclude payment of second trust expense. Payment may be made when additional information is obtained from FHA as to the reasonableness of the expenses.