When It Comes to Housing Assistance, Embassies, Realtors Like to Be Accommodating by Alan B. Nichols Diplomats enjoy some attractive perks, not the least of which is housing assistance from their embassies. All of the embassies contacted by The Washington Diplomat provide some degree of housing assistance for their diplomatic staff, either in the form of direct payments to a landlord or a stipend to diplomats who are then responsible for the payments themselves. The stipend is typically a graduated system with the amount of assistance dependent on rank or seniority and, to a lesser extent, an individualís family situation. A separate utility allowance may be provided or included in the stipend. The vast majority of diplomats in Washington rent homes, apartments or condominiums because to buy makes little sense when their tours in the United States are of a short duration, usually three or four years. Also, in general, banks seem reluctant to give loans to people whose bank accounts are overseas. When exceptions are made and diplomats transfer their funds to a U.S. bank, the process is less complicated, although customer due diligence for foreign account holders is often fairly exhaustive. Moreover, banks are discour aged from making loans because of diplomatsí immunity status. Most embassies have housing service providers that they have worked with over the years. For example, an administrative officer at the New Zealand Embassy said she works primarily with two local real estate companies, one that covers rental properties in Washington and the other in Bethesda, Md. In her 17 years in real estate, Aneta Owens, an associate broker with Cathie Gill, Inc., has developed a close working relationship with all of the Scandinavian embassies. "Very few diplomats buy," she explained, adding that those who do purchase homes have typically in the past had to put 25 percent to 30 percent down on the loan. Furthermore, "it is not that easy for a foreign diplomat to open a bank account" here. "Iíve had a few diplomats buy homes in the U.S.," said Alec Smith of National City Mortgage, "and it was a bit complicated." One of the most active local banks financing diplomatic home purchases has been Riggs Bank, which is in the process of phasing out its embassy business (see August 2004 issue of The Washington Diplomat). A Riggs spokesman said without elaboration that Riggs mortgage business is as thriving as ever and that the bank continues to make loans on the basis of merit. Alfonso Nieto of the Mexican Embassy said that before a new envoy arrives in Washington, he or she will have most likely already made preparations to find accommodations. Often, they will get recommendations from staff already in the country as to location, price, convenience to schools and other important information (see related story page C-). In the early 1990s, Nieto served in Ottawa, where he bought a house. He said he negotiated the interest rate with a British bank that financed his loan, and he was required to pay only 5 percent down. Once a rental property becomes popular with an embassy, it tends to be rented continuously by diplomats in that embassy, according to Rod Johnston, a real estate broker in Georgetown. Johnston, who used to work in international trade in the Reagan administration, said his extensive diplomatic customer base derives from his lengthy experience working with diplomats in the international arena. Landlords, Johnston said, love to rent to diplomats for several reasons. Diplomats take great care of a property, and many embassies make direct monthly electronic deposits into the landlordís account, eliminating the hassle of wondering when the rent check will arrive by mail. Although some diplomats donít buy property in the United States during their career, Johnston said he knows of several foreign envoys who have settled here and bought homes after their careers were finished. Although obtaining mortgages has historically been complicated for non-resident aliens, because of the high down-payment requirement, the Federal National Mortgage Association, which regulates the secondary market for mortgages, has recently revised its rules to make the process much easier for foreign borrowers, according to Cathy Duble, executive vice president at Benefit Funding Corp. Now, she said, foreign diplomats are entitled to the same financing as any borrower provided they waive their diplomatic immunity. This, she noted, is for the obvious reason that a bank doesnít want to be left holding the mortgage bag in case of foreclosure. Even so, said Duble, lenders are still reluctant to accept less than a 20 percent down payment. Nevertheless, Dubleówho estimates she handles five to six diplomatic mortgages a yearósaid her company is actively engaged in building up its embassy mortgage business. "We think thereís a good market here." BridgeStreet Worldwide recognizes that it has a bonanza market in renting to diplomats. Based in Northern Virginia, the company leases rental properties throughout the world and subleases these to its clients. Company embassy specialist Ronda Boatright, who handles the Washington area, said she will typically receive an e-mail from diplomats overseas preparing for their new postings in the United States. The e-mail will specify desired location and other information such as size of unit and convenience to schools, to the embassy and to public transportation. They may also want to know if pets are allowed in the unit. Boatright will then scour her companyís inventory of properties to come up with a suitable match. The length of BridgeStreetís rental agreements vary from a few nights to several years, according to Boatright, who said her company will furnish the property with everything the client needs, including communications and electronic/entertainment equipment. BridgeStreetís inventory includes apartments and townhouses, from studios to three-bedroom units in Washington, Maryland and Northern Virginia. Once a credit check is completed, the company will accept all credit cards, including international credit cards. BridgeStreet charges its clients by the night, according to Boatright, who said her companyís embassy clientele constitute 15 percent of its overall business. With 8,700 units worldwide, BridgeStreet can handle embassy needs even in the diplomatís home country. Alan B. Nichols is a contributing writer for The Washington Diplomat.