With a loud rumble, the bulldozer lunged and caught a corner of Marie Carter's wooden house, pushing in the living room wall and destroying a shameless piece of the Washington area's rural poverty.

As Carter watched the small house that her husband built 40 years ago being leveled, there were no tears, no sad farewells. But there were memories like having to wash out of a bucket because there was no running water and having to cover her bed in plastic to keep off the rain that dripped through the roof.

Now because of a program to help Montgomery County's neediest, Carter can begin building new memories during this holiday season. Last Sunday, she and her three sons moved into a new two-level colonial house built for her by the county.

"We might not have everything like we want it for Christmas, but we are very happy," said Carter, 69, a friendly woman whose hair falls in gentle silver curls at her neck and who insisted that everybody, the construction workers, the county officials, come back to visit her.

The Montgomery program was created 12 years ago to try to replace the county's most deteriorated structures with new houses. Often these houses belong to the rural, elderly poor -- people who, if displaced, have few housing options in a region where prices are among the nation's highest.

Under the program, which lapsed for several years before being restarted three years ago, the county lends residents money at 1 percent interest. The money is used to purchase a new house, usually a prefabricated unit, do soil tests and build new water and septic systems. The loan money comes from an annual $360,000 fund created by the County Council. Carter's is the eighth house built.

"Housing is just a fundamental need," said Steve Brown, rehabilitation supervisor for the county's Department of Housing and Community Development, as he watched Carter's old house be destroyed. "Without this, where would Marie end up in 10 years with the further deterioration?

"She'd have to sell out to a developer, and where would she go? That gentrification process ends up displacing a lot of families that have been on family land for years," he said.

Carter was born in Gaithersburg in 1921 and moved out to the rural stretch of land west of Laytonsville with her husband, John, who in 1950 began single-handedly building their white wood and cinderblock house.

After John Carter died in 1980, the house began to fall apart. About five years ago, the plumbing went. Marie Carter and her sons used buckets to haul water from a neighbor's house for cooking and washing. They used kerosene burners to cut the chill in the two-story structure.

After trying to patch the roof of the old house and replace the windows, county officials decided that the Carters would be candidates for a new house, and one day in October the beige colonial arrived in sections on two flatbeds. Carter watched in wonder from her tiny kitchen window as a giant crane lifted the pieces into place.

"I got on the telephone that evening. I said, 'The house is here!' " she said. Her mortgage will be $171 a month.

Last Sunday, after the water and electricty were connected, Carter and her sons moved in. Yesterday, the house was warm, and frilly white curtains hung at the wide front window where the Christmas tree will go. A member of the Damascus Lions Club came by with four boxes of food and gifts of new sheets and blankets.

"A lot of people say they're sad to see the old house go. I'm not going to say that," Carter said. "If they went through what I went through, they wouldn't say that."