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A certifying officer asked whether escrow and reconveyancing fees are reimbursable costs associated with the purchase of a residence by a relocated employee. He pointed out that those costs might be considered losses due to market conditions and, therefore, be prohibited under Federal Travel Regulations. GAO has recognized that costs associated with certain types of interim financing may be reimbursed incident to an employee's purchase of a residence at a new duty station. GAO views second mortgage transactions as part of a total financial package, essential to the purchase of a new residence. In light of the current real estate market, GAO did not consider the employee's execution of four deeds of trust extraordinary or so unusual as to preclude reimbursement under the Federal Travel Regulations. The execution of the deeds of trust was an integral part of the total financial package and essential to the purchase of the residence. In cases involving second mortgages executed either as permanent or interim financing, GAO has allowed reimbursement to the same extent as costs associated with a first mortgage. Since the escrow fees charged by the bank in connection with the employee's purchase of the property and his execution of the four deeds of trust were charges that may be reimbursed, reimbursement for those fees is proper.


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