Trying to put things right along the Love Canal

''That was Grandma Moschel's house,'' says Carl Sturtevant, pointing out of his picture window to a rambling, slightly shabby, Victorian-style home nearby. ''That's the old homestead . . . around here. It was her summer place.''

Long before Carl and his wife, Loretta, moved into the neighborhood 18 years ago, Niagara Falls residents used to come here for picnics. Even when Grandma Moschel's land was sliced into smaller lots, it retained much of its rural feeling, though it was only five miles from downtown.

But living here has been far from easy -- or quiet -- for the Sturtevants. Streams of federal and state officials, armies of television technicians with their cameras and lights, and thousands of tourists from as far away as Japan and India have flowed into the area.

They are not coming here to see the famous falls. This is the city's Love Canal area. Here many of the remaining residents feel, after four years of upheaval, as though they have gone over the falls in a barrel. But despite uncertainty about its future, things are beginning to return to normal. More children are out playing in the streets and backyards again; joggers are back along Moschel Street; and the first of nearly 400 vacant homes are expected to be sold to eager buyers in the next several weeks.

Redevelopment plans, spearheaded by the Love Canal Revitalization Agency, include offering tax abatements and sizable mortgage subsidies to people who will buy houses in that part of the area called ''ring three,'' declared ''habitable'' by the federal government last month.

The approximately 400 houses in ring three lie farthest from the actual chemical dump, which now looks like a slightly rounded gigantic football field, rimmed with an chain-link fence.

In addition to incentives offered new residents, the just-over 100 families who, like the Sturtevants, have remained here, will have ''first chance'' to buy another house in the area, according to Niagara Falls Mayor Michael C. O'Laughlin, who is also chairman of the Love Canal Revitalization Agency.

''They've stuck through this turmoil for four years,'' Mayor O'Laughlin said in an interview in his City Hall office here. ''Some have indicated they would like to buy a different house in the Love Canal area. I say, give them a chance. They've earned it.''

The Sturtevants have stayed right on Moschel Street and do not plan to move now. In fact, even when the chemical company that employed Carl as an engineer decided to close its Niagara Falls plant, he close not to be moved to another state but to stay on and look for a new job, difficult as this may be. Now that Washington has pronounced the area safe, they are convinced their decision to stay here was the right one.

''I feel that eventually, with all the (cleanup) work going on around here, I'll be living in one of the cleanest places in the nation,'' Loretta Sturtevant says.

Economics also played a part in their decision to stay. New York State, which has spent more than $8 million purchasing Love Canal-area homes, offered the Sturtevants $43,000 for theirs.

State officials say the $43,000 offer was based on what the house's market value would have been if it had not been located in the Love Canal area, where concern over the dump had depressed prices.

To the Sturtevants, however, it was still worth more, and at current mortgage interest rates, the $43,000 wouldn't buy a house of the same quality.

''Where could I find this again?'' Mrs. Sturtevant asks, gazing over the broad tree-shaded lawn between her home and the old Grandma Moschel place.''I would probably be looking at garbage cans.''