diff --git a/src/libs/OptionsListUtils.ts b/src/libs/OptionsListUtils.ts
index f9d7c6f69375..98274e829001 100644
--- a/src/libs/OptionsListUtils.ts
+++ b/src/libs/OptionsListUtils.ts
@@ -221,6 +221,7 @@ type PreviewConfig = {showChatPreviewLine?: boolean; forcePolicyNamePreview?: bo
 type FilterOptionsConfig = Pick<GetOptionsConfig, 'sortByReportTypeInSearch' | 'canInviteUser' | 'selectedOptions' | 'excludeUnknownUsers' | 'excludeLogins' | 'maxRecentReportsToShow'> & {
     preferChatroomsOverThreads?: boolean;
     includeChatRoomsByParticipants?: boolean;
+    preferPolicyExpenseChat?: boolean;
 };
 
 type HasText = {
@@ -358,6 +359,12 @@ Onyx.connect({
     callback: (value) => (allReportsDraft = value),
 });
 
+let activePolicyID: OnyxEntry<string>;
+Onyx.connect({
+    key: ONYXKEYS.NVP_ACTIVE_POLICY_ID,
+    callback: (value) => (activePolicyID = value),
+});
+
 /**
  * Get the report or draft report given a reportID
  */
@@ -1616,11 +1623,15 @@ function createOptionFromReport(report: Report, personalDetails: OnyxEntry<Perso
  * @param searchValue - search string
  * @returns a sorted list of options
  */
-function orderOptions(options: ReportUtils.OptionData[], searchValue: string | undefined, {preferChatroomsOverThreads = false} = {}) {
+function orderOptions(options: ReportUtils.OptionData[], searchValue: string | undefined, {preferChatroomsOverThreads = false, preferPolicyExpenseChat = false} = {}) {
     return lodashOrderBy(
         options,
         [
             (option) => {
+                if (option.isPolicyExpenseChat && preferPolicyExpenseChat && option.policyID === activePolicyID) {
+                    return 0;
+                }
+
                 if (option.isSelfDM) {
                     return 0;
                 }
@@ -2058,11 +2069,14 @@ function getOptions(
     }
 
     // If we are prioritizing 1:1 chats in search, do it only once we started searching
-    if (sortByReportTypeInSearch && searchValue !== '') {
+    if (sortByReportTypeInSearch && (searchValue !== '' || !!action)) {
         // When sortByReportTypeInSearch is true, recentReports will be returned with all the reports including personalDetailsOptions in the correct Order.
-        recentReportOptions.push(...personalDetailsOptions);
-        personalDetailsOptions = [];
-        recentReportOptions = orderOptions(recentReportOptions, searchValue, {preferChatroomsOverThreads: true});
+        // If we're in money request flow, we only order the recent report option.
+        if (!action) {
+            recentReportOptions.push(...personalDetailsOptions);
+            personalDetailsOptions = [];
+        }
+        recentReportOptions = orderOptions(recentReportOptions, searchValue, {preferChatroomsOverThreads: true, preferPolicyExpenseChat: !!action});
     }
 
     return {
@@ -2171,6 +2185,7 @@ function getFilteredOptions(
     recentlyUsedPolicyReportFieldOptions: string[] = [],
     includeInvoiceRooms = false,
     action: IOUAction | undefined = undefined,
+    sortByReportTypeInSearch = false,
 ) {
     return getOptions(
         {reports, personalDetails},
@@ -2199,6 +2214,7 @@ function getFilteredOptions(
             recentlyUsedPolicyReportFieldOptions,
             includeInvoiceRooms,
             action,
+            sortByReportTypeInSearch,
         },
     );
 }
@@ -2423,6 +2439,7 @@ function filterOptions(options: Options, searchInputValue: string, config?: Filt
         excludeLogins = [],
         preferChatroomsOverThreads = false,
         includeChatRoomsByParticipants = false,
+        preferPolicyExpenseChat = false,
     } = config ?? {};
     if (searchInputValue.trim() === '' && maxRecentReportsToShow > 0) {
         return {...options, recentReports: options.recentReports.slice(0, maxRecentReportsToShow)};
@@ -2535,7 +2552,7 @@ function filterOptions(options: Options, searchInputValue: string, config?: Filt
 
     return {
         personalDetails,
-        recentReports: orderOptions(recentReports, searchValue, {preferChatroomsOverThreads}),
+        recentReports: orderOptions(recentReports, searchValue, {preferChatroomsOverThreads, preferPolicyExpenseChat}),
         userToInvite,
         currentUserOption: matchResults.currentUserOption,
         categoryOptions: [],
diff --git a/src/libs/actions/IOU.ts b/src/libs/actions/IOU.ts
index 89de7a76acf8..9cc844849c89 100644
--- a/src/libs/actions/IOU.ts
+++ b/src/libs/actions/IOU.ts
@@ -269,10 +269,10 @@ Onyx.connect({
     },
 });
 
-let primaryPolicyID: OnyxEntry<string>;
+let activePolicyID: OnyxEntry<string>;
 Onyx.connect({
     key: ONYXKEYS.NVP_ACTIVE_POLICY_ID,
-    callback: (value) => (primaryPolicyID = value),
+    callback: (value) => (activePolicyID = value),
 });
 
 /**
@@ -6549,8 +6549,8 @@ function getPayMoneyRequestParams(
     const isInvoiceReport = ReportUtils.isInvoiceReport(iouReport);
     let chatReport = initialChatReport;
 
-    if (ReportUtils.isIndividualInvoiceRoom(chatReport) && payAsBusiness && primaryPolicyID) {
-        const existingB2BInvoiceRoom = ReportUtils.getInvoiceChatByParticipants(chatReport.policyID ?? '', primaryPolicyID);
+    if (ReportUtils.isIndividualInvoiceRoom(chatReport) && payAsBusiness && activePolicyID) {
+        const existingB2BInvoiceRoom = ReportUtils.getInvoiceChatByParticipants(chatReport.policyID ?? '', activePolicyID);
         if (existingB2BInvoiceRoom) {
             chatReport = existingB2BInvoiceRoom;
         }
@@ -6596,10 +6596,10 @@ function getPayMoneyRequestParams(
         lastMessageText: ReportActionsUtils.getReportActionText(optimisticIOUReportAction),
         lastMessageHtml: ReportActionsUtils.getReportActionHtml(optimisticIOUReportAction),
     };
-    if (ReportUtils.isIndividualInvoiceRoom(chatReport) && payAsBusiness && primaryPolicyID) {
+    if (ReportUtils.isIndividualInvoiceRoom(chatReport) && payAsBusiness && activePolicyID) {
         optimisticChatReport.invoiceReceiver = {
             type: CONST.REPORT.INVOICE_RECEIVER_TYPE.BUSINESS,
-            policyID: primaryPolicyID,
+            policyID: activePolicyID,
         };
     }
 
diff --git a/src/pages/iou/request/MoneyRequestParticipantsSelector.tsx b/src/pages/iou/request/MoneyRequestParticipantsSelector.tsx
index 89d4a0fc3664..3d2f85ef6c62 100644
--- a/src/pages/iou/request/MoneyRequestParticipantsSelector.tsx
+++ b/src/pages/iou/request/MoneyRequestParticipantsSelector.tsx
@@ -17,11 +17,13 @@ import useDismissedReferralBanners from '@hooks/useDismissedReferralBanners';
 import useLocalize from '@hooks/useLocalize';
 import useNetwork from '@hooks/useNetwork';
 import usePermissions from '@hooks/usePermissions';
+import usePolicy from '@hooks/usePolicy';
 import useScreenWrapperTranstionStatus from '@hooks/useScreenWrapperTransitionStatus';
 import useThemeStyles from '@hooks/useThemeStyles';
 import * as DeviceCapabilities from '@libs/DeviceCapabilities';
 import Navigation from '@libs/Navigation/Navigation';
 import * as OptionsListUtils from '@libs/OptionsListUtils';
+import * as PolicyUtils from '@libs/PolicyUtils';
 import * as ReportUtils from '@libs/ReportUtils';
 import * as SubscriptionUtils from '@libs/SubscriptionUtils';
 import * as Policy from '@userActions/Policy/Policy';
@@ -64,6 +66,7 @@ function MoneyRequestParticipantsSelector({participants = CONST.EMPTY_ARRAY, onF
     const {didScreenTransitionEnd} = useScreenWrapperTranstionStatus();
     const [betas] = useOnyx(ONYXKEYS.BETAS);
     const [activePolicyID] = useOnyx(ONYXKEYS.NVP_ACTIVE_POLICY_ID);
+    const policy = usePolicy(activePolicyID);
     const [isSearchingForReports] = useOnyx(ONYXKEYS.IS_SEARCHING_FOR_REPORTS, {initWithStoredValues: false});
     const {options, areOptionsInitialized} = useOptionsList({
         shouldInitialize: didScreenTransitionEnd,
@@ -71,6 +74,7 @@ function MoneyRequestParticipantsSelector({participants = CONST.EMPTY_ARRAY, onF
     const cleanSearchTerm = useMemo(() => debouncedSearchTerm.trim().toLowerCase(), [debouncedSearchTerm]);
     const offlineMessage: string = isOffline ? `${translate('common.youAppearToBeOffline')} ${translate('search.resultsAreLimited')}` : '';
 
+    const isPaidGroupPolicy = useMemo(() => PolicyUtils.isPaidGroupPolicy(policy), [policy]);
     const isIOUSplit = iouType === CONST.IOU.TYPE.SPLIT;
     const isCategorizeOrShareAction = [CONST.IOU.ACTION.CATEGORIZE, CONST.IOU.ACTION.SHARE].some((option) => option === action);
 
@@ -124,6 +128,7 @@ function MoneyRequestParticipantsSelector({participants = CONST.EMPTY_ARRAY, onF
             undefined,
             iouType === CONST.IOU.TYPE.INVOICE,
             action,
+            isPaidGroupPolicy,
         );
 
         return optionList;
@@ -139,6 +144,7 @@ function MoneyRequestParticipantsSelector({participants = CONST.EMPTY_ARRAY, onF
         options.personalDetails,
         options.reports,
         participants,
+        isPaidGroupPolicy,
     ]);
 
     const chatOptions = useMemo(() => {
@@ -159,9 +165,10 @@ function MoneyRequestParticipantsSelector({participants = CONST.EMPTY_ARRAY, onF
             selectedOptions: participants as Participant[],
             excludeLogins: CONST.EXPENSIFY_EMAILS,
             maxRecentReportsToShow: CONST.IOU.MAX_RECENT_REPORTS_TO_SHOW,
+            preferPolicyExpenseChat: isPaidGroupPolicy,
         });
         return newOptions;
-    }, [areOptionsInitialized, defaultOptions, debouncedSearchTerm, participants]);
+    }, [areOptionsInitialized, defaultOptions, debouncedSearchTerm, participants, isPaidGroupPolicy]);
 
     /**
      * Returns the sections needed for the OptionsSelector