Request for Reimbursement of Real Estate Expenses

An agency requested a decision regarding the propriety of certifying for payment a reclaim voucher for $460 in favor of an employee, representing a real estate expense incurred in connection with the purchase of his residence when he was transferred to a permanent duty station. The agency denied the claim on the basis that the amount was a loan origination fee, a cost incident to the extension of credit, and not reimbursable under regulations. The employee furnished documentation from the lending institution which showed that the $460 loan origination fee included $225 for attorneys fees, a survey fee of $35, and $16 for recording fees. GAO held that the remaining $184, not characterized other than as a loan origination fee, was disallowed by regulations. The specifically identified charges, however, may be reimbursed if the charge is expressly excluded from the finance charges. Regulations provide that fees for required property surveys are excluded from the finance charges; therefore, the $35 survey fee was certified for payment. The recording fees were not part of the finance charges and may be reimbursed if they are customarily paid by the purchaser in the area and do not exceed the amounts normally charged. The employee may be reimbursed for the attorneys fees if they are properly itemized and it can be determined that the fees were for purposes specifically excluded from the finance charges, according to regulations.