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Clintons Get House, Criticism

Some critics and mortgage experts say the financing the Clintons settled on for their $1.7 million house in a New York City suburb raises questions of special treatment. Others see the terms as reasonable.

The Clintons will pay about $8,500 a month in interest, plus periodic lump sum payments toward insurance and taxes. Tax records indicate the Clintons will pay about $26,000 annually in real estate taxes.

President Clinton and Hillary Rodham Clinton dropped their original plan to rely on a wealthy friend and political fund-raiser, Terry McAuliffe, for help in securing the mortgage for the Chappaqua, N.Y., home.
Mrs. Clinton must establish residency in New York if, as expected, she seeks the Democratic nomination for Senate from New York next year.

The Clintons officially bought the house last week. They say they'll live in the five-bedroom, three-story wood frame house, with swimming pool and exercise room after leaving the White House in January 2001.

Kenneth Harney, who writes a syndicated column on real estate, says the Clintons are putting down less than most people who take out mortgages that size, and they did not have to make the usual choice between paying "points," or add-on fees, up front, and getting a lower interest rate overall.

That does not necessarily mean the loan is improper or even beyond the bounds that any bank might consider.
Banks have a great deal of leeway when making this kind of "super-jumbo" loan, and may evaluate a variety of factors, including future earning power, bankers said.

The Clintons are borrowing the money from PNC Mortgage Corp., the nation's 12th largest home lender last year.

However, the Conservative Campaign Fund alleges the bank is giving a political candidate a sweetheart deal in violation of FEC rules.

The Clintons have a reported net worth of roughly $1.5 million, much of it in trust. Clinton makes $200,000 a year as president, and the family earns about the same amount annually in income from the trust.

They have about $5.5 million in legal debts from years of Whitewater and Monica Lewinsky scandal investigations, but those bills are supposed to be paid out of a separate, private fund.

Their income makes the Clintons reasonable candidates for the loan amount and the agreed monthly payment, said Paul Reid, executive vice president of the Mortgage Bankers Association of America.

The terms of their deal are unusual in some respects -- such as a 20 percent down payment in a market that typically demands at least 30 percent for this kind of loan -- but not alarming, Reid said.

"That doesn't sound like there's been a real giveaway here," Reid said.

The Clintons' 20 percent down payment amounts to $340,000. The money will come from the family's blind trust.

The loan carries a fixed rate of 7.5 percent for three years, and then converts to an adjustable-rate mortgage. They will pay no points; a point equals 1 prcent of the loan amount, or $13,600 in the Clintons' case.

By Harney's reckoning, the Clintons got both a favorable interest rate and the benefit of zero points. Usually it is one or the other, he said.

Clinton stands to earn a bundle from books, speaking tours or corporate fees in retirement. Their mortgage is presumably structured with the assumption he will be the family breadwinner, but Mrs. Clinton could also earn a large salary as a lawyer if she does not end up a senator.

For those reasons and others, the Clintons are in a class by themselves, the Mortgage Bankers' Reid said.

"You're not looking at the average Joe," Reid said. "He's also the president of the United States."