Darrah Cloud may or may not have needed something like the American College Theater Festival to prove her worth, but the American College Theater Festival certainly needed someone like Darrah Cloud.

She is a senior at the University of Iowa and the author of "The House Across the Street," which swept through the Kennedy Center's Terrace Theater last weekend, dissolving its audiences in laughter and/or horror. Besides being an outrageous comedy touched with genius, "House Across the Street" is refreshing proof that a bold, offbeat entry can prosper in a large government-funded competition. (With a play like this on tap, it becomes even harder to understand the ACTF's decision to give its top playwriting award this year to a frivolous campus musical called "Going On!")

This is a black comedy, a form of play that seemed to have vanished almost completely in the homogenized humanism of the '70s. The setting is suburban Chicago -- the living room of the Fortune home, inhabited by a conventional middle-class American couple, their conventionally half-crazed son and daughter and a cataonic grandmother who sits in a wheelchair, staring into space.

The mother carefully instructs her kids to treat Grandma with respect, but respect, it soon becomes clear, is not one of the dominant personality traits in this household. The son, Donald Fortune Jr., is a magnificent specimen of goofy, god-for-nothing, malevolent suburban adolescence, both as Cloud has written the character and as an actor named Scott Smith plays him. Donald Jr. doesn't just advocate euthanasia as an abstract proposition -- he gives the impression that he would be only too happy to commit it on his grandmother, even if something more energetic than pulling the proverbial plug were required.

When Grandma unexpectedly comes alive, moves her hand and clutches her granddaughter's shoulder, Donald promptly cracks a vase over her head -- to protect his sister, he explains. Grandma flops back in her chair, presumably dead but regarded with massive indifference by everyone on stage. Only the mother responds -- with an astonished cry of "Oh!" and, after a pause, "My vase!" (She asks Donald how it happened Grandma was doing things, he explains. "What things?" the mother retorts. "Weird things, vegetable things," he says, going on to develop a theory that she isn't Grandma at all but an alien presence a la "Invasion of the Body Snatchers.")

Meanwhile, the police are gradually searching and demolishing a neighboring house where a mass murderer has buried his victims, finding a new carcass every few minutes and dumping it on the sidewalk in a body bag, as Donald watches raptly through the window. The county coroner comes acalling and accuses the Fortune family of standing idly by, ignoring all the comings and goings -- or, to be precise, the comings unaccompanied by goings -- that should have tipped them off to what was happening outside their window. But the joke -- the all-encompassing joke of the play -- is that the cruelty and violence of the Fortune household seems just as grisly as the mass murder they stand charged with ignoring.

A great deal happens, and a great deal of thematic territory is crossed in "The House Across the Street." What with its mass-murder plot angle and its bemused, deeply unsettling picture of the modern American family, it recalls Jules Feiffer's "Little Murders," although this is probably a more ambitious and succeed work even in its current, ragged state. After intermission, the play comic focus and takes some questionable turns. Still, the playwright's sharp ear, her flair for the theatrical and her extraordinary imagination are ever present. (When Grandma begins communicating with the family, her daughter-in-law asks her way she didn't do so before, and Grandma's reply is: "I tried, but the weather was bad and I couldn't get through.")

""swansong for a Unicorn," another original student play which preceded "House Across the Street," was impressive after a very different fashion. Written by Sarah Nemeth and produced by Northwestern University, "Swansong" is a low-key portrait of a Northern Alabama woman who is being forced from her home by the construction of a new dam. "Swansong" is about as orthodox in the present context of the American theater as "House" is unorthodox, but the picture of family relationships is strong, and Nemeth has her own distinctive sense of humor. And nothing about the play, thankfully, has the pretentious quality of the title.

Together, these are the sort of plays that transform the ACTF, every so often, from a painful philanthropic exercise into an annual event worth attending and sustaining.