Three weeks ago, Cheverly town officials were prepared to take the federal Department of Housing and Urban Development to court over five HUD-owned houses that town officials alleged had been "abandoned" and allowed to deteriorate.

Cheverly officials filed a lawsuit in U.S. District Court in Greenbelt alleging that the houses posed a danger to public health and safety. The lawsuit asked for a judge to order HUD to clean up the properties and sell them.

The lawsuit was filed, Cheverly officials said, because HUD was unresponsive to their concerns. But the agency became very responsive after a news article about the lawsuit appeared Nov. 16, Cheverly officials said.

Within days, HUD crews were dispatched to clean some of the properties, and officials from the town and the federal agency said last week that they have reached an amicable resolution that should keep the matter out of court.

"I trust that this is going to work out," said David W. Warrington, Cheverly's town administrator.

"This is a very positive resolution," said Matt Franklin, a HUD official who helped work out the agreement with Cheverly officials.

HUD purchases properties that have been foreclosed and sells them to buyers who will maintain them. Four of the homes named in the lawsuit were acquired by HUD last year, the other in 1994.

Franklin attributed some of the frustration felt by Cheverly officials to a breakdown in communication between HUD and town officials.

After reading the story about the lawsuit, Franklin said, he looked into the matter and learned that HUD had sold one of the five houses, in early November. HUD also accepted an offer on another of the five houses shortly after the lawsuit was filed, leaving three properties unsold, Franklin said.

HUD has now agreed to sell those houses to the town of Cheverly, at prices 30 percent below their appraised value under a HUD program, Franklin and Warrington said.

Cheverly officials plan to quickly "flip" the homes--sell them to buyers who will keep the properties in good order and live in them, Warrington said.

The Town Council is scheduled to take up an ordinance by Dec. 16 that would allow the town to buy the three properties, and Cheverly officials should have possession of the houses by early January, Warrington said. With the discount, the town would pay about $170,000 for the three properties and sell them for the same amount, Warrington said.

He credited Charles A. Stek, a member of Sen. Paul S. Sarbanes's staff, with encouraging HUD officials to act quickly. Sarbanes (D-Md.) is a member of the Senate Banking, Housing and Urban Affairs Committee, which controls HUD's budget.

Stek said he has heard from officials from other towns and counties, including Montgomery and Prince George's, who have concerns similar to the ones Cheverly officials had regarding HUD-owned properties. Stek said HUD officials have agreed to meet with those officials to address their concerns.

Although HUD officials would like to see Cheverly drop its lawsuit, Warrington said he is not prepared to do that.

"We plan on withdrawing the suit as soon as we own the properties," Warrington said.