President Clinton and first lady Hillary Rodham Clinton announced that their $1.7 million bid for a century-old house on an acre of land in suburban New York City has been accepted, a purchase they will finance with major assistance from the Democratic Party's top fund-raiser.
The Clintons plan to close on the Westchester County property, a five-bedroom house built in 1899, on Nov. 1, making them private homeowners for the first time since Clinton's second election as Arkansas governor in 1982.
The $1.35 million mortgage from Bankers Trust is being guaranteed by Terence McAuliffe, a friend of the Clintons who was in charge of fund-raising for the president's 1996 re-election. Clinton golfed with McAuliffe Thursday.
There had been plans, according to sources, for former White House chief of staff Erskine B. Bowles, who is independently wealthy, to guarantee or co-sign the loan for the debt-ridden first family.
But this plan fell through when Bowles backed out at the last minute, to the consternation of the Clintons, sources said.
Bowles, reached at his home in North Carolina Thursday night, declined to comment.
The sale was put back on track when McAuliffe agreed to secure the loan with $1.35 million in cash as collateral.
McAuliffe's guarantee has been approved by federal ethics overseers, said Jim Kennedy, a spokesman for the White House counsel's office. "It (the guarantee) is determined not to be a gift. That was confirmed by the Office of Government Ethics."
Kennedy said the mortgage would be a five-year, adjustable-rate balloon mortgage with an interest rate that has not been fixed, and the Clintons' monthly payments are not yet determined.
The interest rate would change every six months, making the Clintons' monthly payments rise or fall with the decisions of Federal Reserve Chairman Alan Greenspan, whose reappointment Clinton must decide on by next June.
Estimated taxes for the house are $25,922 per year, according to a listing on the Realtor.com Internet site.
Assuming the purchase goes through without any of the last-minute hitches that often plague expectant home buyers, Mrs. Clinton will have an address in the state where she plans to run for the Senate in 2000 with a full year to spare in order to meet the Empire State's lenient residency requirements, which demand only that she live there on Election Day.
Although Mrs. Clinton previously had toured the house in Chappaqua, the president saw the place only once, Saturday. Aides said they quickly decided it was the right place.
But this was about the only part of the house search that was easy. There were extensive discussions among some advisers about the political implications of the house purchase, considering everything from its location to the price.
Though the house is in a desirable neighborhood at the end of a cul-de-sac called Old House Lane, it is far from the most opulent section of Westchester.
Security was among the most complicated factors, some Clinton advisers said. The Clintons did not bid on one property they liked after the Secret Service, which will provide protection for them after he leaves the presidency, raised logistical concerns.
Although Clinton's earning power after leaving office is substantial -- as is Mrs. Clinton's if she does not go to the Senate -- their present financial situation complicated their ability to get a loan. Due to unpaid legal bills from the numerous congressional and independent counsel investigations that have targeted them, the Clintons are several million dollars in debt.
They plan to put $350,000 down on the purchase, just over 20 percent, using money taken out of the blind trust in which they keep their savings. In contrast to the typical 30-year mortgage, ballon mortgages, which typically can be had at lower interest, are attractive to people who have expectations of greater wealth within a few years.
The 5,200-square-foot house, which is white and screened from the road by evergreens, has five bedrooms and four bathrooms, an exercise room on the top floor and an outdoor pool. The sellers, Jeffery and Cheryl Weisberg, chose the Clintons' from several bids, White House officials said.
Some Clinton advisers expressed concern that all the attention to the house hunt might be contributing to a lame-duck image for a president in his seventh year. But Clinton, who has said he plans to stay fully engaged with work until his last day in office, seemed happy Thursday. On vacation in upstate New York, he flashed a thumbs-up sign to reporters and said: "We're very pleased about the house. It's beautiful."