[Question Concerning Reimbursing Employees for Loan Origination Fees]

The Veterans Administration (VA) asked for guidelines concerning reimbursing two employees for loan origination fees incurred in connection with the purchase of their residences at their new duty stations. VA had reimbursed the employees for a 1-percent loan origination fee but requested guidance as to whether the employees may be reimbursed additional amounts. GAO has held that a loan origination fee constitutes a finance charge and may not be reimbursed. However, the General Services Administration amended the regulations to authorize reimbursement of loan origination fees as long as lenders in the area customarily charge a loan origination fee. Accordingly, since the fees were within the maximum limit customarily charged in the locality, the employees may be reimbursed for the additional loan fees to that extent.