Clintons Drop Plan to Accept Home Loan Aid

WASHINGTON — President Clinton and First Lady Hillary Rodham Clinton have abandoned plans to accept a friend’s loan guarantee and are seeking a conventional mortgage for the $1.7-million home they want to buy in suburban New York, a source said Saturday.

The Clintons hope to complete a new financing arrangement by Nov. 1, their original closing date, said the source, who is familiar with the Clintons’ financial planning and who spoke on condition of anonymity.

They were reported to be considering options from several lending institutions to enable them to purchase the five-bedroom home in Chappaqua, N.Y., about an hour north of New York City. Mrs. Clinton is considering a Senate run from New York in 2000 and must establish residency before election day.

Under the initial financing plan, the Clintons agreed to use their own money for the $350,000 down payment. Terry McAuliffe, a Clinton friend and one of his chief fund-raisers, put up $1.35 million as collateral to guarantee the money the Clintons are borrowing.

The Clintons and the White House said there was nothing illegal or unethical with the arrangement.

But public interest groups and some Republicans disagreed.

A conservative group, in a complaint filed Sept. 10 with the Federal Election Commission, alleged that personal loans and guarantees for personal loans have always been treated the same as campaign contributions and are subject to the same $1,000 limit.

An FEC spokeswoman, while not commenting on the complaint itself, said generally the law mandates that loans and loan guarantees for candidates are subject to campaign limits if they are related to the campaign.

The Conservative Campaign Fund contends that because Mrs. Clinton must establish residency in the state to run for a Senate seat the home loan was campaign related.