The Navy requested an advance decision concerning whether a transferred employee may be reimbursed for a loan assumption fee he paid in connection with the sale of a residence at his old duty station. GAO noted that the purchaser of the residence at the old duty station assumed the employee's loan and the mortgagee charged a loan assumption fee, of which the purchaser paid part and the employee paid the remainder. GAO has held that a loan assumption fee which involves costs similar to those covered by a loan origination fee may be reimbursed as a miscellaneous real estate expense. However, GAO found that, in the area of the employee's old duty station, the seller of a residence did not customarily pay loan assumption fees when the buyer assumed an existing mortgage. Accordingly, the employee may not be reimbursed for the portion of the loan assumption fee he paid.
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