Savings are possible, but . . .Going the old-house route

Getting a low-priced house is the best way to have lower nonthly payments in spite of high interest rates. But where can you find a nice house these days, at a price you may be able to pay, and in a good location?

Finding repossessed houses, investing in "sweat equity" houses, restoring a historical site with government loans, or rehabbing a "homestead" are some alternatives.

If you're willing to go a little off the beaten path, you can knock as much as $20,000 off the price tag of a house.

When it comes to finding repossessed houses, it will take some persistence, but homeowners do sometimes default on their payments or on their real-estate taxes. Auctions are occasionally held, so keep an eye on local newspapers.

Did you know that some lenders will go ahead and approve a loan for, say, $35 ,000 or $40,000, and then let you wait for the right house to come up? That applies to any house on the market, and not just repossessed ones.

Contact several lending institutions and let them know you are interested in buying a repossessed house. Local Federal Housing Administration and Veterans Administration officials keep track of government-backed mortgages that are foreclosed.

Check with your city housing office for houses that must be auctioned for back taxes.

Sweat equity can mean several things. You migh organize a group to buy out an entire block of row houses with an agreement with the mortgage lender that each house will be renovated.

In cities such as Atlanta and Baltimore, for example, neighborhood associations have been formed to do just this.

Other programs are also offered, such as fixing up a rundown house which you might be able to buy from your city for a very low figure. Some cities offer this type of program in order to bring more people back into the city, thus broadening the tax base.

Make sure the whole neighborhood is on the upswing, however.

Sweat equity co-ops are being formed in cities all across the country, too. Buyers find sound, even if neglected, structures of brick or stone with solid oak floors, high ceilings, and large windows - or other traditional features. Each person has to roll up his sleeves, pull down old wallpaper, strip paint, and turn his own space into a livable area.

Real-estate brokers can steer you to these projects.

For the culturally minded do-it-yourselfer, there are historic houses you can acquire very easily sometimes. Houses within historic districts, or those listed in the National Register, may qualify for federal grants, loans, or other aids.

If this kind of projects sounds appealing, you may want to start watching "This Old House" on your public-broadcasting TV station. It's a program that will be aired at least through late fall, and probably beyond.

The show's host, Bob Vila, is redoing an old mansion, making weekly progress reports.

You may wish to join the National Trust for Historic Preservaton which has a number of free booklets on federal programs and incentives for historic preservation and guides on how to save older structures. Write to the National Trust, 748 Jackson Street, NW, Washington, D.C. 20006.

Homesteading is still around in the US also. A local office of the Department of Housing and Urban Development can assist you in getting a loan for such a house.

Many homestead houses are available in larger cities for practically nothing. There's a catch, however.

Such programs require the buyer to fix up the house within a certain time, usually one to two years, and live in it for three years.

An excellent book, even though it was published two years ago, is: "The Complete Book of Home Buying," by Michael Sumichrast and Ronald Shafer, published by Dow Jones & Co., Princeton, N.J. Mr. Sumichrast is chief economist for the National Association of Home Builders.

All you need to be on your way to owning a house of your own, aside from an adequate income, is the determination to see you goal through.

If one way doesn't pan out, try another.

Second of two articles on how to buy a house of your own despite sky-high prices. The first appeared one week ago today in this space.m