The handmade Christmas ornament has had a good four years, thanks to Joan Mondale, the most effective advocate of the visual arts and crafts in public life, and Rosalynn Carter, whose White House decorations have been characterized by great good taste, a love for the handmade, and an appreciation of originality.

Joan Mondale commissioned all the best artists-craftsmen in the country to do ornaments for the tree at the vice president's residence. Mrs. Carter, in her first White House year, asked the mentally impaired to make ornaments. iOne year she used antique handmade toys, and another Christmas, ornaments by Corcoran art school students.

This year, the custom has spread. The Renwick Gallery shop has almost sold out of handmade ornaments, some by glass artists from the Renwick's "New Glass" show. The glass ornaments by Tom McGlauchlin, Vitrex and Don Jacobson cost a pittance ($11 on up) of what a larger work would. Porcelain snowflakes by Coille Hooven and tatted flakes by Lorene Steinberg seem as varied as the kind that melt. A cupid (clothed only with Christmas ribbon and holding a jumping rope) and a carrousel horse by Katherine Ryan of Takoma Park, Md., are porcelain and priced as art. Jill Ruhlman's ceramic angels, and a face with spaghetti hair (actually an ocarina) by Carolyn Bassing of Takoma Park are other novelties.

The Corcoran Gallery of Art has handmade ornaments as well, including a hand-painted toy soldier by Bethann Shannon, yarn wreaths and paper stars by artist Jame, and origami (Japanese folded paper).

Appalachiana is a shop that pioneered country-style, handmade crafts in this area. This year, proprietor Joan Farrell and her partner, Ann Powell, invited craftspeople all over the country to enter a Christmas ornament competition. Two hundred responded, most of them people who make crafts for their own pleasure instead of profit. Though the entries came from 35 states, some of the best seemed to be from this area. The textile ornaments outnumbered all the rest.

Among the best: first-prize winner, Holly Levin of Germantown, Md., Sugar Plum Faerie, a soft sculpture; Yvonne Khin of Bethesda, a stocking full of fabric children; Barbara J. Birney of Rockville, a soft-sculpture flying Santa; Sylvia Grady of Elgin, Ill., a stocking angel, with belly button; Denise E. Pringle of Arlington, faces in a pod.

Among the best non-fabric ornaments: Jane Ferree of Raleigh, N. C., a sterling silver star; Bobbie Peaslee of Santa Barbara, Calif., a paper quilling star; Dorie Pouch of Guildord, Conn., a papier-mache gnome; Hilda Kraus of Westport, Conn., a pewter Adam and Eve; Happy Viers of Rockville, decoupage balloon with ribbons.

Almost all the entries, except one rather strange black magic pornographic entry (immediately disqualified), are hanging in the windows of Appalachiana at 10400 Old Georgetown Rd. through the holidays.

Judges were: Neil Clark, crafts fair promoter, Hazel Carter, quilting expert and Mary Bowron, ceramicist.