Legal Authority For Home Marketing Incentive
Legal Authority For Home Marketing Incentive
April 10, 2009
This relocation incentive award program is new to the Government. Previous
efforts to establish such a program centered on changing or adapting the Federal
Travel regulations to this purpose. Instead, this program adapts Title 5,
U.S.C., Chapter 45 to this purpose.
The relocation home marketing incentive will take the form of a Special Act
or Service (SAS) award, structured in keeping with Title 5, U.S.C., Chapter 45,
which authorizes agencies to grant awards to employees. The Office of Personnel
has generally encouraged agencies to make maximum use of their authorities under
Part 451 of the Code of Federal Regulations, which discusses agency
authority, describes an SAS award as a contribution or accomplishment in the
public interest which is a non recurring contribution either within or outside
of job responsibilities which benefit the Government. This definition is
consistent with the activity of a transferee’s sale of their home, by allowing
for the fact that the transferee’s sale of a home returns tangible benefits to
the Government, but is not directly a part of the employee’s job
While Federal Travel Regulations (FTR) limit reimbursable expenses related to
residence transactions to certain maximum amounts, these limitations would not
apply to this incentive program, because:
- The FTRs exempt flat-fee contracts such as GSA’s relocation serves
- The incentive envisioned would not be payment reimbursing an expense,
but rather an award for an accomplishment. Regulations against subsidies on
buy outs also do not apply, as they are meant to preclude reimbursements for
market loss, not awards.
Determination of Eligibility
To be eligible for the home marketing incentive award, an employee must
satisfy the basic requirement of the SAS award which is the vehicle for the
incentive program—namely, to achieve savings for the government.
- Successfully market their homes in connection with an authorized
permanent change of station, including a sale and closing on the property
resulting in an amended sale fee transaction.
- List properties at a price no more than 5 percent above either the
Broker Price Opinion or the Marketing Strategy’s suggested list price
(whichever is higher).
- Employees must list their property for sale with a qualified broker; and
- Employees must have their properties listed for at least 30 days of
which at least 21 days must be after receipt of the guaranteed offer from
the contractor. (Unless an amended from zero sale is obtained before the
guaranteed offer from the contractor.)
These provisions ensure that every property in the program receives adequate
market visibility at a reasonable price.
Home Marketing Incentive Program
The Home Marketing Incentive Program (HMIP) is classified as an optional
benefit, not an entitlement. Participation in the HMIP is at the discretion of
USDA agencies. Therefore, not all agencies will offer a HMIP. The goal of HMIP
is to reduce the Government’s relocation costs by encouraging transferred
employees to sell their home as an “amended value sale” through the RSC. A home
sold under “amended value” significantly reduces the fees/expenses agencies pay
to the Relocation Services Companies. Agencies pay a significantly higher fee
for homes sold under the “appraised value” or the “guaranteed buy-out sale.”
- The policy for participation in the HMIP requires:
- Employee’s residence must be sold through the Relocation
- Employees must list their residence with a qualified broker and
independently and aggressively market their residences.
- Employees must find a bona fide buyer for their residence as a
result of the independent-marketing efforts.
- Employees must meet any additional conditions established by
their agencies, including, but not limited to, mandatory marketing
periods, list-price guidelines, closing requirements and
- In accordance with Section 5) Policy and General Rules of this
policy, HMIP offers eligible employees an award of 2 percent of the
selling price of an employee’s home, but not to exceed $5,000. The
payment of HMIP will be generated by NHQ and processed through Human
Resources as a special act award payment to employees.
- Tax Consequences:
- HMIP is considered income and agencies will withhold income taxes
and employment taxes. Employees will not receive a withholding tax
allowance (WTA) or a relocation income tax (RIT) allowance to offset the
tax consequences of participation in the HMIP.