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  4. Real Estate / Unexpired Lease Allowance

Real Estate/Unexpired Lease Allowance

How to complete DD 1351-2
Other PCS Entitlements
DD1351-2 Voucher Checklist House Hunting Trip (HHT) Misc Exp Allowance (MEA)
Frequently Asked Questions En Route Travel Relocation Income Tax Allow (RITA)
Conversion Rates Mvmt/Storage of Goods En Route Travel to/from OCONUS
  POV Shipment within CONUS Renewal Agreement Travel (RAT)
Temp Qrtrs Subsistence Exp (TQSE) POV Shipment Pick-up/Drop-off Exp

Real Estate/Unexpired Lease Allowance
Joint Travel Regulation (JTR), Chapter 5, paras. C5750-C5765

General Conditions:
You may be authorized reimbursement for certain expenses required to be paid by you in connection with the sale of your residence (which may be a mobile home and/or the lot on which the mobile home is, or is to be, located) at the old duty station; and/or the purchase of a residence at the new duty station. In lieu of real estate sale expenses at the old duty station, reimbursement is allowed for expenses associated with the settlement of an unexpired lease on a place of residence, or lot on which a mobile home is located. Reimbursement may be allowed when:

  1. A transportation agreement is signed;
  2. A PCS must be authorized or approved between two duty stations within the United States and/or non-foreign OCONUS areas like Hawaii or Puerto Rico (with exceptions);
  3. The residence at the old PDS must be the employee's actual residence at the time he/she was first definitely informed by the appropriate authority that he/she was to be transferred to a new duty station;
  4. The settlement dates for the sale, purchase or lease termination transaction are within the one-year time limitation;
  5. The residence/dwelling is the residence from which the employee regularly commutes to and from work.

    Note: If your effective date of transfer was before 1 August 2011, you have two years to execute your entitlements.  If your effective date of transfer was 1 August 2011 or later, the time to execute the entitlement is reduced to one year.

Time Limitations:
The settlement dates for the sale and purchase or lease termination transactions for which reimbursement is requested must not be later than one year after the date that you reported for duty at the new duty station. Upon your written request, the one-year time limitation may be extended by the commanding officer of the activity bearing the cost, or his/her designee for an additional period of time not to exceed an additional one year. Your employee's written request should be submitted to the appropriate authority as soon as you become aware of the need for an extension but must be before the expiration of the one-year limitation.

Note: Relocation allowances must be calculated by using the allowances in effect on the employee's effective date of transfer.

The general rule is that you may be reimbursed for real estate expenses incurred before, and in anticipation of a transfer, if a clearly evident administrative intent to transfer you exists at the time the expenses are incurred. Due to legal requirements, if the claimed expense was incurred before the travel authorization was issued or transportation agreement signed, DFAS-Rome requires that a copy of written intent to transfer accompany the real estate claim, to authorize reimbursement (e.g., if you have been placed in the priority placement program, or you have formally accepted the offer to transfer). You must have a travel authorization (DD Form 1614) prior to submitting a claim for reimbursement of authorized expenses.

Other General Requirements:
The title to the residence at the old or new duty station, or lease with regard to an unexpired lease, must be in your name alone, or in the joint names of you and one or more dependents, or solely in the name of one or more dependents. If the title is in your name and that of someone who is not your dependent, only a partial reimbursement is given. Title interest must have been acquired prior to the date you were first officially notified of the transfer. In cases where a divorce occurs prior to the settlement date of a real estate transaction, and the ex-spouse is on the title, generally a partial reimbursement is made. You are only reimbursed for expenses actually incurred and paid by you or a dependent.

Reimbursement Limits:
For employees whose effective date of transfer is on or after March 22, 1997, the following rates apply:

1. In connection with the sale of the residence at the old PDS, reimbursement must not exceed 10 percent of the actual sale price.

2. In connection with the purchase of a residence at the new PDS, reimbursement must not exceed 5 percent of the purchase price.

Allowable Expenses for Sale of Residence:
The following expenses are typically reimbursable when reasonable in amount and customarily paid by the seller in the locale where the property is situated:

1. Broker's fees or realtor commission
2. Other advertising and selling expenses (i.e., newspaper, bulletin board, multiple-listing services, etc.), only if not listed with a broker
3. Costs of searching title, preparing abstract and legal fees for a title opinion/title insurance policy
4. Costs of preparing conveyances, other instruments/contracts
5. Related notary fees and recording fees
6. Costs of making surveys, preparing drawings or plats when required for financing purposes
7. Lender required inspections
8. Transfer taxes
9. Reasonable attorney fees
10. Charge for prepayment of a mortgage

Allowable Expenses for Residence Purchase:
The following expenses are typically reimbursable when reasonable in amount and customarily paid by the buyer in the locale where the property is situated:

1. FHA or VA fee for the loan application
2. Loan origination fees (generally up to 1 percent of loan amount)
3. Credit report
4. Mortgage and transfer taxes
5. State revenue stamps
6. Mortgage title insurance policy paid for by the employee on a residence purchased by the employee for the protection of, and required by, the lender
7. Owners title insurance policy when required by the lender as a prerequisite to financing; normally optional and not reimbursable
8. Expenses in connection with the construction of a residence that are comparable to purchasing an existing residence
9. Lender's appraisal fee (only one is reimbursable)
10. Survey
11. Closing costs
12. Recording fees
13. Document preparation fees
14. Reasonable attorney fees
15. Expenses in connection with environmental testing and property inspection fees when required

Expenses that are not Reimbursable:
Except as otherwise provided, the following items of expense are not reimbursable:

1. Owner's title insurance policy, "record title" insurance policy, mortgage insurance or insurance against loss or damage of property, and optional insurance
2. Tax service fee (charged to buyer to compute and prorate the tax obligation)
3. Interest on loans, points, and mortgage discounts or "rate buy downs"
4. Home owners warranty (ERA warranty, Blue Ribbon warranty)
5. Property taxes
6. Operating or maintenance costs
7. Cashier's check
8. Any fee, cost, charge or expense determined to be part of the finance charge
9. Home improvements
10. VA funding fee
11. Buyer's expenses paid by the seller
12. Expenses that result from construction of a residence
13. Legal fees where sale is not consummated
14. Losses due to prices/market conditions at old/new duty station

Helpful Real Estate Hints:
When buying a home, ask your bank to itemize or spell out what is included in your "points" charges. Sometimes the charge for points includes an appraisal fee, legal fees for document preparation, and survey cost, each of which may be reimbursable if listed as such. Points relating only to mortgage interest are not reimbursable.

When buying a home, you may find the hiring of a Home Inspection Service to be worthwhile. This is NOT a reimbursable expense, but it can save you money. There are two types of services. One type provides a report only of the structural areas of your house that are damaged, worn and need repair. The second type actually provides a one-year guarantee on various household appliances, such as the furnace, electrical system, or plumbing.

Reimbursement of real estate expenses is permitted ONLY after they have been reviewed and approved and forwarded to DFAS Rome Center (DFAS-JFTBAD/CO).

Note : Separate packages should be submitted for the sale and purchase of a residence.

All DFAS and DISA funded employees should submit their claims for review and signature in block 18 or 19 by fax to 317-212-7369. POC phone number is 317-212-3254 or DSN (312) 699-3254. If you are unable to submit a fax then DFAS and DISA funded employees may submit their claims by mail to:

DFAS INDIANAPOLIS CENTER
ATTN: DFAS/HG, COL. 208BB

PCS REAL ESTATE
8899 EAST 56TH STREET
INDIANAPOLIS , IN 46249

All Navy and Civilian Army funded employees should submit their claims for review and signature in block 18 or 19 to your designated agency or official.

For Sale of residence - The official designated to approve reasonableness of charges at the OLD DUTY STATION (generally a lawyer in the legal office or a personnel officer) must review and sign the DD Form 1705 in section IV, block 18. In cases of base closure, ordinarily the nearest military installation reviews claims for reasonableness. Note : All DFAS funded employees see directions above.
For Purchase of residence - Submit to the Personnel office at your NEW DUTY STATION to be forwarded to the official designated to approve reasonableness of charges. The official signs the DD Form 1705 in section IV, block 19. Note: All DFAS funded employees see directions above.

BOTH sale and purchase of residence must be approved by the NEW DUTY STATION official designated to approve payment, by a signature on the DD Form 1705 in section IV, block 20.

There is no authority for reimbursement of expenses to travel to the old duty station to finalize real estate transactions.

How to complete the DD Form 1705

Completion of this form is your responsibility. The following guidelines may prove helpful when transferring expenses from the settlement statement to the DD Form 1705:

DD Form 1705 Settlement Statement
Item 21 Sales/Brokers' Commission Fees   Lines 700 - 703
Item 22 Advertising Fees   Separate receipt usually needed. Not on settlement statement.
Item 23 Appraisal fee (sale)   Line 803.
Item 24 Legal and Related Fees   Lines 1101-1113, 1201 and 1301.
May be separate receipt for actual
attorney fee.
Item 25A Prepayment charge   Separate receipt usually needed.
If you see this, include copy of mortgage in package.
Item 25B Lender's Appraisal fee   Probably covered under line 803.
POC means part of fee was paid in cash. Separate receipt is needed.
Item 25C FHA/VA application fee   May be on statement or on a separate
receipt.
Item 25D Certification Fee   Lines 805 and 1302.
Item 25E Credit Report Fee   Line 804. May be POC amount
requiring a separate receipt.
Item 25F Mortgage Title Policy Fee   Line 1109 if not claimed under item 4.
Item 25G Escrow Agent's fee   Line 1101.
Item 25H City/County/State Tax Stamps   Lines 1202 and 1203.
Item 25I Sales or Transfer Taxes; Mortgage Tax   Seldom used.
Item 26 Other Incidental Expenses   Everything else left on form that the JTR authorizes reimbursement for (801, etc.).

Download the DD Form 1705 to get started!

Where to submit your for Real Estate Expenses Claim
After expenses have been incurred and paid for, submit the following by fax to one of these numbers:
Commercial: 216-367-3422
DSN: 580-7833

 

Voucher Submission:

  1. DD Form 1351-2: Include appropriate signatures and dates.
  2. DD Form 1614, Travel Authorization, including any amendments.
  3. A DD Form 1705 (Application for Reimbursement of Expenses Incurred by DoD Civilian Employee) Upon Sale or Purchase (or both) of Residence upon Change of Duty Station.
  4. A copy of Settlement statement. (Itemized list of charges for the sale or purchase of a residence. This form requires signatures of both the seller and the buyer.)
  5. A copy of Sale and/or Purchase agreement. (Must have both the seller and buyer's signature.)
  6. DFAS-Rome requires a copy of receipts for expenses paid in cash outside of closing. (i.e., application fee, credit report, etc.)
  7. Any advance payment paperwork, DD Form 1351-2

Where to Submit your Unexpired Lease Expenses claim
After expenses have been incurred and paid for, submit the following by fax to DFAS-JTA/RO at the fax numbers listed above.

Voucher submissions:

  1. DD Form 1351-2: Include appropriate signatures and dates.
  2. DD Form 1614, Travel Authorization, including any amendments.
  3. A copy of the lease explaining penalties or other costs payable if occupancy is terminated prior to the lease expiration date.
  4. Documentation showing the extent of bona fide attempts made if the lease includes a saving provision for subleasing or making other arrangements to avoid penalty costs.
  5. Itemization and explanation necessary for clarification of penalty costs claimed for reimbursement and paid receipts for each expense item. Examples of this would be: a letter from the landlord accepting the terms to vacate; or a copy of the final ledger from the landlord or rental agent.
  6. A copy of the employee's notification of the intent to vacate (provided to the Landlord/Rental Agency).

Allowable Expenses for Settlement of Unexpired Lease:
You may be authorized reimbursement for certain settlement costs of terminating an unexpired lease involving your old residence. This reimbursement also applies to the lot on which a mobile home was located, as long as the mobile home was used as your residence.

To qualify for this reimbursement, you must be able to show that the lease was in your name alone, or in the joint names of you and a dependent. If the lease is in your name along with someone who is not your dependent, reimbursement is on a prorated basis. You also must be able to show that the lease was signed before the date when you were first informed of your PCS.

Become familiar with the provisions/requirements of your lease. Some examples of the expenses that may be reimbursed for settling an unexpired lease are:

1. Broker's fees for obtaining a sublease
2. Charges for advertising an unexpired lease

Such expenses are reimbursable when:

1. Applicable laws or the terms of the lease provide for payment of settlement expenses.

2. Such expense can not be avoided by subleasing or other arrangement.

3. The employee has not contributed to the expense by failing to give appropriated lease termination notice promptly after he has definite knowledge of the proposed transfer.

4. The broker's fees or advertiseing charge are not in excess of those customarily charged for comparable service.

Itemization of these expenses is required, with the total amount entered on the travel voucher. Each item of expense must be supported by documentation showing that the expense was, in fact, incurred and paid by you. We recommend the voucher be submitted separately, so as not to hold up other allowances.

Note : When authorized Real Estate Expenses and Unexpired Lease Expenses, you may request reimbursement for an Unexpired Lease or a Real Estate Sale, NOT BOTH.

Note: For authority to reimburse an employee for a lease penalty expense incurred for early termination of a lease in a U.S. or a foreign area incident to a transfer to or from a foreign area, see DSSR , FTA, HSTA Sections 240 and 250, respectively, as stated provided in JTR, par. C1004.

Use of Relocation Service Companies (JTR, Chapter 5 (pars. C5800-C5849))
There is a DoD contract with a private firm under which DoD components may offer relocation services to its designated employees. The services provided include, but are not limited to the following:
1. Home-sale program
2. Home finding assistance
3. Home marketing assistance
4. Property management (PM) services
5. Mortgage finding assistance

The Guaranteed Home Sale program (#1 above) is not available for all employees. If your PCS travel authorization specifically authorizes use of the "home buy-out" or "relocation services" known as the Home Equity Act, it is in lieu of the PCS reimbursement allowances for sale transactions. The personnel office handles all aspects of these programs.

Home Marketing Assistance
The purpose of a home marketing incentive payment (HMIP) is to encourage you to independently and aggressively find a buyer for your residence, thereby reducing the Government's relocation costs. The authorizing/order-issuing official determines when such a payment is authorized, in addition to the dollar amount authorized. The maximum payment is $10,000. This payment is treated as taxable income, and taxes are withheld. There is no authority to pay WTA or a RIT allowance to offset the taxes incurred.

To qualify for a HMIP, an employee must:

  1. Enroll in the home-sale program,
  2. Market the residence independently,
  3. Locate a buyer,
  4. Transfer the residence to the relocation services company, and
  5. Meet any additional conditions established by the DoD component.

You are provided with an approved (signed by the authorizing/order-issuing official) source document with the computed payment for HMIP. Currently, an official DoD source document for payment of HMIP does not exist. The document submitted for payment may be a locally developed form, for attachment to the travel claim (DD Form 1351-2). Agencies may assign personnel to administer the HMIP process and paperwork. The form, at a minimum, must contain the following information:

1. Employee's name (last, first, middle initial)
2. Employee's social security number
3. Employee's present position, title, grade
4. Current organization
5. Current duty phone number
6. Detailed computation of the HMIP clearly showing how the approved amount was compared to the maximums per JTR, par. C5849, and determined to be the lesser of the following:

a. One to five percent of the price the relocation service company paid when it purchased the residence from the employee, to include the approved percentage (1% to 5%) and the price the relocation company paid or the buyout offer amount on the residence
b. $10,000
c. One half of the savings realized from the reduced fee/expenses paid as a result of the employee finding a bona fide buyer and the sale is closed, to include the percentages relative to the relocation company's service costs.

Note: The Relocation Services Company must complete the amended sale transaction and submit the employee's real estate invoice for payment before the HMIP computation can be computed. If no savings are realized, a home marketing incentive may not be paid.

7. Authorizing/order-issuing official's signature
8. Traveler's signature

Where to submit your Home Marketing Incentive Payment (HMIP):

After the above has been accomplished, submit the following by fax to
DFAS-JTBAD/RO at one of the following fax numbers:
Commercial: 216-367-3422/3423/3424
DSN: 580-7833/7834/7835

Voucher submissions:

  1. DD Form 1351-2: Include appropriate signatures and dates.
  2. DD Form 1614, Travel Authorization, including any amendments.
  3. A copy of the approved document (as described above, which may vary by agency).

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Instructions for completing a DD Form 1351-2 for Real Estate / Unexpired Lease / Relocation Services

Block 1: Payment
Electronic Funds Transfer (EFT) is mandatory absent a waiver from your agency. You may submit a DD 2762, or other documentation as long as it contains the following to ensure payment is properly transferred to your account:

  1. The Traveler's name
  2. The Traveler's SSN
  3. The Traveler's address
  4. The routing number
  5. The account number
  6. Whether the account is Checking or Savings

Split Disbursment when available requires an "x" in the block requesting it and the dollar amount to be sent to the Government Travel Card. If reimbursement is less than the amount requested, then the whole reimbursement would be sent to the Government Travel Card.
Block 2: Name: Last name, first name, and middle initial of Employee.
Block 3: Grade of the Employee.
Block 4: Social Security Number of Employee.
Block 5: Indicate "PCS" and "Member/Employee" - for employee only.
Indicate "PCS", Member/Employee", Dependent(s) - for employee and dependents.
Indicate "PCS" and "TDY' - for TDY enroute.
Indicate "PCS", "Dependent(s)" - for dependent(s) travel only.
Blocks 6a-6d: Valid mailing address for receipt of advice of payment.
Block 6e: Valid e-mail address.
Block 7: Daytime telephone number in the event DFAS Rome should need to make contact.
Block 8: Order number which is listed on the orders or amendments, (See DD Form 1614 Block 25), provided to the employee.
Block 9: List any and all previous payments paid from any finance office pertaining to the travel period being claimed. List " 0.00" if you have not received any payments and "?" if you are not certain.
Block 10: Do Not Use - Leave Blank.
Block 11: Employee's new duty station address where employee is being assigned. (See DD Form 1614 Block 8).
Blocks 12 through 17: Do not require completion with claims for Real Estate, Unexpired Lease, or Relocation Services
Block 18: Reimbursable Expenses:
a: List the date of the closing or approval of the Real Estate, Unexpired Lease, or HMIP
b: Depending on the claim list "Real Estate Sale", Real Estate Purchase", Unexpired Lease Expenses", or "HMIP; Home Marketing Incentive Payment".
c: List the total amount being claimed for the expense listed in (b.) above.
Block 19: Does not apply to this Civilian Permanent Change of Station claim.
Block 20: Claimant Signature and Date: (a & b): Physical signature of traveler and date the voucher was signed. Both must be complete. The member signs all PCS claims.
Block 20: Supervisor/Reviewer and Date: (c & d): Supervisory Chain of Command signature. All parts (20c, 20d, 20e, & 20f) must be completed. Check with your order issuing agency in case your claim is to be forwarded for review before submission to DFAS Rome.
Block 21: (If applicable) Handwritten name and signature of approving officer if authorizing expenses not listed on original order.
Note : Approving officer must list additional expenses authorized in block 29 and must complete Blocks 21a,b,c,&d.
Block 22: Leave Blank - Finance Office use only.
Blocks 23-28: Leave Blank - Finance Office use only.
Block 29: Used to clarify anything out of the ordinary, such as:
Indicate any and all leave periods during TDY.
Clarify any additional travel-related issues.
Reflect exchange rates when working with foreign currency.
List/explain any additional expense authorized after the Fact by the AO.
Note : For Home Marketing Incentive Payments you are provided with an approved (signed by the authorizing/order-issuing official) source document with the computed payment for HMIP. Currently, an official DoD source document for payment of HMIP does not exist. The document submitted for payment may be a locally developed form, for attachment to the travel claim (DD Form 1351-2). Agencies may assign personnel to administer the HMIP process and paperwork. The form, at a minimum, must contain the following information:

1. Employee's name (last, first, middle initial)
2. Employee's social security number
3. Employee's present position, title, grade
4. Current organization
5. Current duty phone number
6. Detailed computation of the HMIP clearly showing how the approved amount was compared to the maximums per JTR, par. C15103, and determined to be the lesser of the following:

a. One to five percent of the price the relocation service company paid when it purchased the residence from the employee, to include the approved percentage (1% to 5%) and the price the relocation company paid or the buyout offer amount on the residence;

b. $10,000

c. One half of the savings realized from the reduced fee/expenses paid as a result of the employee finding a bona fide buyer and the sale is closed, to include the percentages relative to the relocation company's service costs.

Note: The Relocation Services Company must complete the amended sale transaction and submit the employee's real estate invoice for payment before the HMIP computation can be computed.

7. Authorizing/order-issuing official's signature
8. Traveler's signature

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View the sample form below then download the DD Form 1351-2 to get started!

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Frequently Asked Questions

Must I sell a residence at the old official station to be eligible to purchase a residence at the new official station?
No, you do not have to sell the residence at your old official station to be eligible for residence purchase transactions at your new official station.

How long do I have to submit my claim for reimbursement of expenses incurred in connection with my residence transactions?
Your claim for reimbursement should be submitted to your agency as soon as possible after the transaction occurred. However, the settlement dates for the sale and purchase or lease termination transactions for which reimbursement is requested must occur not later than one year after the day you report for duty at your new official station.

May the 1-year time limitation be extended by my agency?
An extension may be granted only if extenuating circumstances prevented the employee from completing the sale, purchase and/or lease termination transaction within the initial 1-year period and that the delayed transactions are reasonably related to the PCS. (CBCA 2092-Relo, 13 October 2010)

Will my agency reimburse me for losses due to market conditions or prices at the old and new official station?
No, losses incurred due to market conditions or prices at your old and new duty station are not reimbursable when incurred by you due to:
(a) Failure to sell a residence at the old official station at the price asked, or at its current appraised value, or at its original cost; or
(b) Failure to buy a dwelling at the new official station at a price comparable to the selling price of the residence at the old official station; or
(c) Any losses that are similar in nature to (a) or (b) .

What residence transaction expense are reimbursable if an employee violates the terms of his/her service agreement?
If the employee violates his/her service agreement, no residence transaction expenses will be paid, and any amounts paid prior to such violation shall be a debt due the United States until they are paid by the employee.

How must I request reimbursement for settlement of an unexpired lease?
To request reimbursement for settlement of an unexpired lease, you must itemize expenses (list all expenses separately) on a travel voucher and submit the voucher to your agency.

How will I be reimbursed when I share a lease with someone else?
When you share a lease with someone else you will be reimbursed on a pro rata basis for that portion of the lease that you are responsible for.

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Regulatory Links

Defense Travel Management Office 
Travel Regulation
Federal Travel Regulation (FTR) 
Joint Travel Regulation (JTR) 
Financial Management Regulation, Volume 9: Travel Policy and Procedures
Government Sponsored Travel Card