Self-help housing. `Sweat equity' programs let would-be homeowners invest labor in lieu of dollars. (WEST COAST)

Bob Madsen is grinning, even though he just accidentally put his hand on a post he's painting, leaving distinct finger marks in the fresh paint. In 10 years of marriage to Tricia - who works beside him, painting trim on a window - his family has grown steadily, forcing moves to larger apartments as the Madsens' three daughters were born. Bob has worked the past seven years for a rental company, loading equipment.

And although the Madsens have never lived anywhere but apartments, they've never stopped dreaming about owning a home, which seemed - considering their finances - about as likely as receiving a visit from E.T.

``This is my home. This is a dream come true,'' Mr. Madsen says, without pausing in his painting. ``I believe in this project.''

The Madsens are one of 30 families working in teams to build their own homes in a subdivision called Lamarque Court, using a technique known as ``mutual self-help housing.'' Several of the ``families'' consist of single people; quite a few are single parents.

Despite the varying number of heads under each roof, the families have certain things in common. Most are young and energetic. They're all working at low-paying jobs. None have owned homes before. Conventional financing would be out of the question. All are fiercely dedicated to owning their own homes - dedicated enough to put in the 30 hours a week on the construction site required of each family (the labor of friends and relatives may be used to meet the quota), in many cases on top of a full-time job.

Lamarque Court is being developed by the nonprofit Nevada County Housing Development Corporation. Low-interest loans were provided by Farmers Home Administration, and resources and construction expertise (including contractors to supervise each team of future homeowners, most of whom had little if any building experience) are being provided by the Rural California Housing Corporation in Sacramento.

Participating families were carefully screened to make sure their incomes fall within acceptable parameters set by the federal department of Housing and Urban Development. Their incomes must be low enough to qualify as ``low or very low'' income, but high enough to repay the loan. In rural Nevada County, where Lamarque Court is located, earnings must range from approximately $9,000 for a single person to $24,000 for a family of six.

No down payment is required.

``We have a huge number of residents [in Nevada County] who normally can't afford to buy a home because they can't save the down payment. But they can qualify for self-help,'' says Jan Bray, executive director of Nevada County Housing Development Corporation.

``We didn't have these houses handed to us. Each of us had to fight to get these loans,'' Madsen says. And families have worked incredibly hard on their homes - in some cases without a day off from work or construction for months.

But the Madsens' payoff is a blue, three-bedroom, one-and-a-half bath home (1,125 square feet). And when they move in, they'll know every child, man, and woman in the neighborhood - and that's not all. ``We know where every stud is, where every mistake is. We know every square inch of these homes,'' Madsen explains.

In mutual self-help programs, families work on their homes in teams. Certain parts of the job - pouring foundations, wiring, plumbing, insulation, sheetrock, and carpet-laying - are subcontracted to professionals. No family moves in until all the homes of that family's team are completed.

Under normal conditions, it's expected that the homes can be built in one month apiece - i.e., a nine-family team will complete its nine homes in nine months.

Across the street from the Madsens, Stacey Kastner is on a ladder, painting the home she's somehow managed to build while holding down two cooking jobs and teaching aerobics three times a week. Single, Ms. Kastner is building a two-bedroom, one-bath home - at 873 square feet, it's the smallest of four house plans being used at Lamarque Court.

``It's been really good,'' she says of the building experience. ``The only thing I complain about is the quality of the wood they've brought us.... They sent us headers that were seriously warped and we couldn't use them.'' Another complaint: ``You have to do everything according to plan. You can't make changes.'' Asked what she would change, Kastner says she'd like to install some skylights and use different linoleum than what's being supplied.

``I still love it,'' she's quick to add. ``For all of us out here, this is like a dream come true. You become really emotionally involved. I have a real emotional attachment to this house.''

Another neighbor, Arnette McClure, is employed full-time as a retail clerk at K mart and raising three daughters. Her father, Arnold Stunkel, a retired painting contractor, has put his talents to use building her three-bedroom, one-bath home, and around the rest of the neighborhood as well. ``He did everybody's painting and most of my work,'' Ms. McClure says.

Mr. Stunkel's spray painting improved the appearance of the homes, as they went from uniform white primer to shades of blue, cream, and brown. ``They start looking like homes when they're painted,'' he says.

``There are a lot of needy people who need homes,'' he adds, ``and this is one way to get that accomplished.''