We're spending billions making our homes more livable. Americans in the past year have spent almost half as much remodeling and repairing their homes as they have on the purchase of new homes. The Census Bureau reports that we spent $31.5 billion on alterations and repairs to our houses last year. A spokesman for the National Association of Home Builders estimates that during the same period, Americans spent about $65 billion for new single family houses.

In recent years, the gap between what we are spending for new houses and for improvements has narrowed. A major factor is the shift upward in the cost of borrowing money. Those who would have traded up to larger housing find interest rates prohibitive.

Predictably, many of the improvements being made to Washington area homes are modest. The area's architects, contractors and lenders speak of families who need to improve the livability of their houses, but who don't want to sink a lot of money into them.

The design solutions presented in the articles that follow address the nagging problem of trying to add more space for less money. That may mean enclosing a side or back porch, or popping up a roofline with a dormer, or tucking a new or remodeled bath into a closet.

Remodeling costs can be as high as new construction, but imaginative homeowners are finding ways to do much of the work themselves. Some owners have arranged to work for their contractors as "helpers." Others have hired the experts to frame up the additional rooms and then leave the finishing -- the insulation, the drywall, even some of the wiring -- for the owners to do. Sweat equity can save dollars if you have both the time and the talent. If you don't, you can always serve as a general contractor and hire subcontractors.

Serving as your own general contractor can save as much as 30 percent on the cost of a job, but it too is time-consuming. For those who don't have that kind of time and don't know how to go about serving as their own general contractor, the best thing to do is hire a reliable, reputable contractor to oversee everything. Be certain you have a written contract that clearly spells out costs, changes as they are made and a timetable for tasks and payments.

Finding the money for your remodeling job is probably the biggest problem. For small jobs, there's always the savings account. For larger jobs there are a variety of generally unattractive options. You can get a small second mortgage from a bank or savings and loan institution. (Except in the District, where, as of this writing, one could not get a second mortgage for home improvements because of the 15 percent usury ceiling.) Area lenders report most second trusts are running anywhere from $10,000 to $20,000, with terms ranging from 10 to 12 years maximum. You can apply for an unsecured home improvement loan, usually under $3,000, for no more than 24 months, or you can finance an improvement by credit card.

In Maryland last month, home improvement loans were being made for 16 percent plus two points. In Virginia, rates were close to 17 percent plus 2 points.

If you can't get a second mortgage, you may be able to refinance your first mortgage against the increased value of your house. The interest rate will be higher than you are now paying but still well below that current for new mortgages. Perpetual American Federal Savings & Loan Association in Washington, for example, was willing recently to let a borrower who still owed $49,000 at 9 3/4 percent on a first mortgage to increase his loan to $64,000 at 11 7/8.

Sometimes the answer is a small loan from parents at an interest rate that is attractive to them and not as steep as commercial rates. Some contractors will finance your improvements, but the cost may run about the same as commercial lenders. Some may offer you low finance charges but a high remodeling price. Negotiate the price first, them inquire about financing.

Some contractors will allow you to phase your payments according to as fixed schedule. The tight money market has forced many of the smaller contractors out of businesds, so those who are left are often cautious about a negotiated payment schedule. It does, however, pay to shop around.