Sen. John F. Kerry (D-Mass.) has devised a novel way to deal with two problems that chronically confront newly elected members of Congress: campaign debts and the high cost of housing in Washington.

Shortly after taking office, the Massachusetts Democrat bought a $175,000 house on Capitol Hill. To pay for it, he took out a $473,313 mortgage from a Rhode Island bank, putting the extra money toward paying off his campaign debt.

"It was part of a consolidation of a series of debts, predominantly from the campaign," said Ron Rosenblith, the senator's administrative assistant. "We were looking for the best way to deal with all this and decided to consolidate it into one large note . . . so it's all under one umbrella."

Rosenblith said Kerry will pay that part of the debt attributable to the house and that the Kerry campaign committee will pay the rest.

According to records filed with the Federal Election Commission by his campaign committee, Kerry, who is related to the wealthy New England Forbes family, lent his campaign $162,000 during 1984 and personally guaranteed an additional $135,000 in loans from two Massachusetts banks. The campaign spent slightly more than $2 million during the year, and its total debt at the end of the year was $420,876, according to the FEC report.

Kerry bought the five-bedroom town house at 125 Third St. NE on Jan. 14 from Mr. and Mrs. J. M. Idema, according to Rufus S. Lusk & Son, a real estate information service here.

The loan was written by the Fleet National Bank, based in Providence, R.I. The interest rate, Rosenblith said, is the prime rate plus one percentage point. The prime rate -- that which banks charge their best customers -- is currently 10 1/2 percent, which would make the current rate on the loan 11 1/2 percent.

Interest payments are due quarterly, and the senator must pay $125,000 in principal by the end of this year, another $125,000 next year, and the balance by the end of the year after, Rosenblith said.

In addition to the house, Kerry is leaving $50,000 on deposit with the bank as collateral, has taken out a collaterally assigned insurance policy, and has pledged his personal property, Rosenblith said.

Officials of Fleet National said that the bank as a matter of policy would not comment on an individual loan. But Helen M. O'Donnell, a vice president, said that a loan that exceeds the purchase price of a property is "not an unusual circumstance." She said extra collateral is often required, but if the bank is satisfied with the collateral and the borrower's plans for the money, it will make the loan.

Conversations with FEC and other regulatory officials in Washington indicated that Kerry's arrangement was in no way improper, either for him or the bank, as long as all reporting requirements are met.

At the office of the comptroller of the currency, which regulates national banks, a spokesman said that "banks choose who they lend their money to" and that a loan would not attract regulators' attention unless it became delinquent.

Rosenblith indicated that Kerry expects to be able to pay the loan in a timely fashion. "We're starting to work away at" the campaign debt, and fund-raisers this month and last have generated $100,000 or more, he said.

He said he expects the senator to "do some renovation" on the house. Industry sources said they understand Kerry plans to turn two of the bedrooms into a single master suite, and to redo the kitchen. The house was described as "one room deeper than most" on the Hill, with a double living room, dining room and kitchen on the first floor.

The three-story brick structure was built in 1900, and is currently assessed for tax purposes at $198,217, according to Lusk.

Why did Kerry chooses a Rhode Island rather than a Massachusetts bank for his loan? Convenience, said Rosenblith. "They have an office at 60 State St. [in Boston] where John had his law office." CAPTION: Picture, Capitol Hill town house purchased by Sen. John F. Kerry for $175,000. By Dudley M. Brooks--The Washington Post