THREE YEARS AGO, financed by borrowed money and a small stake of its own, a group of Washington citizens formed the Jubilee Housing Corporation. The directors of this non-profit organization were members of the Church of the Saviour, an ecumenical group that is respected in the city for its FLOC program (For the Love of Children), literacy classes, prison work and other socially useful ministries. Jubilee's involvement in low-income housing led it to the Ritz and Mozart apartment buildings in Adams-Morgan. A quiet but impressive success story has been evolving since.

The gamble in November 1973 involved the odds of rehabilitating the two decaying, rat-infested buildings that were carrying more than 700 housing code violations. To replace slum housing with good housing meant, first, that volunteers would have to come forward. Many did so. An estimated 50,000 volunteer hours have gone into the physical renovation of the two buildings - from students groups coming in for a weekend of sanding floors to skilled craftsmen repairing the electrical and plumbing fixtures.

The second goal was more elusive: removing the distrust that the low-income families in the apartments naturally had for management. Many of the families (the average income per household was about $5,000) had had bitter experiences in losing battles against absentee or unaccountable landlords. It helped that, during rehabilitation of the Ritz and Mozart, no tenant was asked to leave. This wasn't another clear-out-the-poor-make-way-for-the-rich operation. In addition, rents for the renovated apartments were set below the current market levels by 25 to 35 per cent. Finally, the landlord-tenant tension was eased by involving families themselves in the buildings' operations and day-to-day decisions.

If these two goals have been met - and the evidence suggests that they have - the third may be the most challenging; raising funds to enable purchase of the buildings and then transfering ownership to the tenants under a co-op plan, with rental payments expected to cover operating costs. Jubilee officials report that they have a $200,000 grant from the Lilly Endowment, which leaves $539,000 to be raised.

If federal of city funds were available, Jubilee Housing would seek them. But the housing emergency in Washington is so severe that Jubilee officials believe that "substantial efforts and assistance from the private sector are obviously necessary to make any kind of measurable impact . . . There is an increasing national awareness that we do not have the resources through federal programs alone to meet the legitimate needs of our people for decent housing." The Ritz and Mozart stand as solid testimony to what a few citizens can do for themselves and for others. The question now is whether others will take the opportunity to join in.