It took three floods and two clusters of mushrooms growing from her floor before Annette Henneghan finally decided to move.

For 18 months, Henneghan, 39, lived in a ground-floor condominium at the southeastern tip of Washington, having her carpets deodorized and cleaned when it flooded and trying not to worry about the four-inch-tall fungi that grew in her bedroom and near the bathroom. She was pregnant and, with three children already, moving seemed too difficult to consider.

But by last May, a year and a half after she moved in, Henneghan had had enough. She couldn't take the strain of knowing that a heavy rain would mean a flooded home, ruined furniture and worries that the carpets might not be safe for her kids to walk on. In June, she moved in with family members. Soon after, she filed for bankruptcy, and her mortgage company foreclosed on her condo.

It was an unexpected end to what she said was her dream: owning her first home. When she bought the newly renovated apartment in the fall of 2001, Henneghan remembered, she was impressed by the looks and location, and excited that she could afford it.

Henneghan said she told the sales agent, Roger Black, that she had never bought a house. "I said, 'There's got to be a catch to it, because it just sounds too good to be true.' "

It was just that, say Henneghan and 30 of her former neighbors at Kings Crossing II, a beige-brick complex that houses 42 units in three four-story garden apartment buildings off Naylor Road.

In a lawsuit filed in D.C. Superior Court, the residents, nearly all of them low-income and first-time homebuyers, said the developers misrepresented the conditions of the units, which they say violated the building code.

The suit targets developers and mortgage lenders, arguing that the developers intentionally lured low-income buyers into the units with low down payments and used fraudulent loan applications to qualify them for homes they could not afford, ensuring financial problems. The mortgage lenders, the suit alleges, then sold the loans to investors for a profit -- an irresponsible move, the suit says, because the mortgage companies should have known the residents would be unlikely to pay off the loans.

That's in part because mortgage lenders and developers falsified housing documents to qualify for federally insured mortgages, the suit alleges.

The FHA requires purchasers to submit down payments of at least 3 percent of the total cost of the property. Even though some Kings Crossing II buyers did not make large enough down payments to qualify for those loans, the suit says, the mortgage and developer defendants got federal backing for the loans by listing larger figures as down payments and attributing the money to gifts, which the lawsuit says the buyers did not receive.

The suit targets 14 defendants. Countrywide Financial Corp., its subsidiary Countrywide Home Loans Inc., and two of the company's loan officers, along with Presidential Bank F.S.B, are accused of profiting from the mortgages.

The suit also targets developer Eric Fedewa and two development companies he owns: Regent Crossing LLC and Ascend Communities LLC. Sales agent Black and another Regent Crossing employee are also named. Another defendant, Washington Technology Group, a real estate and acquisition company, is owned by Fedewa's father, Lawrence, who is not a defendant in the suit.

Defendant Express Title Co., a real estate settlement company, and one of its employees are accused of mortgage fraud for allegedly falsifying federal loan forms. Chesapeake Appraisal Services is accused of inflating its appraisals of the units.

Through lawyers, some defendants named in the suit blamed the complex's problems on poor maintenance after the residents bought the units, and called the suit a way to pin blame on entities that are not at fault.

"For the most part, most of the issues with the project are the result of the building and the facilities not being maintained after it was purchased," said Stephen Seeger, representing Fedewa.

Seeger suggested that the suit was propelled by one of Fedewa's former employees, Julie Conrad, who is involved in a dispute with Fedewa over money she says he owes her from a separate project. She resigned from Fedewa's company, for which she helped publicize the apartments, in late 2002, and now represents the condo association.

A lawyer for Black, the agent for the property, said the lawsuit's allegations are untrue. The lawyer, Jay Range, said he would file a motion to dismiss the suit if it is not dropped.

Black and Fedewa declined to comment. Lawrence Fedewa said his company did nothing wrong but does not want to "fight the case in the newspaper."

Bruce Cleveland, president of Presidential Bank, which the suit accuses of mortgage fraud for the one loan it made, disputed the allegations and said the loan was legal.

Countrywide spokesman Rick Simon said the company is investigating the complaint and does not comment on pending litigation.

Employees and representatives of Chesapeake Appraisal and Express Title Co. did not return repeated phone calls asking for comment.

What is not in dispute is the quality of the units and the anger of some of their owners. Those residents live in units that have mold on the walls and carpets, and cracks in the walls. Running water into the tub can cause leaks into the condominiums downstairs, and running the dryer risks overheating the home or blowing a fuse, they say.

For some, buckets serve as permanent furniture, catching water that drips from the ceilings. To protect her downstairs neighbors from her leaky bathtub faucet, LaVana Fitzhugh, 59, said she carried boiling water from her kitchen to fill the tub.

The kitchens came with new appliances, including ovens and stovetops, but the hoods above the stoves are empty, missing the exhaust pipes that normally diffuse the heat of cooking, residents say.

When Fitzhugh and other neighbors run their dryers, which are installed in the kitchen, they said they open the doors of their cabinets and the windows of the condominiums. That's because the dryers are ventilated into adjacent cabinets, a violation of city code that requires dryers to be vented outside, they say.

Exposed pipes in the boiler room drip onto the floor, creating puddles that leak out into the hallway.

The electrical systems, which by law must function separately in each condominium unit, are shared by multiple units. Residents say the systems do not supply enough voltage to accommodate the appliances.

The Department of Consumer and Regulatory Affairs cited Fedewa for code violations in connection with the dryer ventilation and the electrical system in 2002.

Residents blame those problems on the developers, who they say did not perform the renovations advertised before selling the units. Seeger said that the building was in proper condition when the units were sold and that the developer should not be held responsible for maintenance problems after the units were purchased.

The buildings had long been home to rental tenants, some of whom purchased their units after Fedewa bought the buildings and offered to renovate the apartments. Several longtime residents said they were disappointed by the renovations, but many said they plan to stay in the units -- they just wish the ceilings didn't leak and the dryers wouldn't overheat the kitchen, and they hope the lawsuit will make that happen.

But others who want to move say they feel trapped.

Mayra Quirindongo, 28, who now owns a one-bedroom condominium she would rather not live in, did not even plan to buy when she first approached sales agents about another property. They instead told her about Kings Crossing and showed her an analysis comparing the costs of renting and owning, which convinced her that buying might be economical. But the calculations did not include the condominium fees, or the costs of repairs, she said.

After she moved in, she said, the heating convectors leaked and her carpets grew so moldy from leaks from the ceiling that she had to replace them.

"At the time, I couldn't afford a home inspector, and going in and just doing my own visual inspection, I couldn't tell there were all these problems," she said.

She is awaiting the outcome of the lawsuit before deciding what to do next.

After living with relatives and having her condominium foreclosed upon, Henneghan now lives in District Heights, in a rental apartment that never floods but where she worries she is not as safe. She still gets angry when she thinks about the anxiety she went through.

The experience has changed how she thinks about the future, she said.

"I'd never bought a home before, so maybe I didn't ask the right questions," she said. "Maybe I should have done more. I'm very, very skeptical now about things."

LaVana Fitzhugh shows a leaky ceiling in her bedroom. Because her own tub faucet leaks through the floor, Fitzhugh bathes with water from her kitchen. Ceilings over the hallways of Kings Crossing II are covered with mold. Some ceilings, like the one in this picture, are falling down.