Thin gray rats dart through the hallways of the Pumpkin Hill Apartments these hot summer days, routed by the clang of hammers and the whine of power saws.

These are the sounds of carpenters. Once again, the U.S. Department of Housing and Urban Development is pouring money into this South Laurel slum.

More federal money is earmarked for fix-up programs at two other Prince George's County housing projects - Central Gardens and the Glenarden Apartments.

After sinking $35 million into six Prince George's subsidized apartment projects that today are virtually uninhabitable, HUD plans to throw in millions more to bail out some of them.

Critics think HUD is throwing good money after bad.

"It's an effort to treat cancer with a Band-Aid," said one consultant familiar with HUD projects.

Many frankly say they believe no amount of additional money can make these six projects - Pumpkin Hill, Central Gardens, Washington Heights, Baber Village and the Nalley and Glenarden apartments - into success stories.

"As long as people are living in these places crowded together, there's no hope," says Prince George's County Executive Lawrence J. Hogan.

In diciding why these projects fell so far short of the Kennedy-Johnson dream of providing decent housing for lower- and middle-income Americans, there is plenty of blame to go around.

Profit-minded owners and negligent tenants bears a share, together in some cases with Prince George's County officials.

But in any effort to determine how this fiasco happened - how so much tax money could have been spent building slums - the discussion always turns back to HUD.

"It's easy to look at these situations now and see a classic sort of sensational battle between the owner and the poor tenant," says one former official who worked in HUD's area office. "But if you look behind that you find this great gray mass, which is HUD, and the flowing chain of regulations and decisions that created it all."

From the beginning, most critics say HUD overlooked potential problems in its effort to build low-cost apartments as fast as possible in Prince George's and other areas. As a result, HUD officials now concede, hundreds of apartments were crammed on small tracts of Prince George's land, while the need for open space and recreation areas was often ignored.

"These projects were built in a time when we saw a pressing need for housing," says Robert Ratcliffe, housing management director in HUD's Washington area office. "There was tremendous emphasis on putting units up, and often the possible problems were overlooked because of that."

Additionally, HUD officials now agree federal loan programs of the 1960s were too inflexible to allow the apartments' private owners to cope with inflation.As a result, some owners had to choose between increasing rents that were supposed to stay low, deferring maintenance or failing to make interest payments.

Finally, many HUD officials complain that inadequate staffing left federal loan officers overburened, keeping them from noticing or correcting problems in the projects before it was too late.

Currently, two senior loan management officers and four junior officials are responsible for overseeing all 440 HUD housing projects in the Washington area. Some individuals are charged with keeping watch on as many as 95 apartment complexes.

In one case after another, such factors meant an inevitable decline. For instance:

Plan for the 825-unit Pumpkin Hill development were approved by HUD although the project was in South Laurel, miles away from most bus lines and shopping centers. Many families found Pumpkin Hill inaccessible and refused to move there.

Four other failing projects - Baber Village, Central Gardens, Nalley Apartments and Washington Heights - were built adjacent to each other, crowding thousands of low-income families into a small area.

HUD regulations drafted in 1966 prohibited "swimming pools . . . air conditioning and similar items" in federally subsidized apartments. At Baber Village, a playground for several hundred children had two swing sets, two monkey bars and two see-saws, according to a 1972 county report. "This is perhaps the most glaring absurdity at Baber Village," the report said.

In some cases, HUD regulations increased the density of projects. Officials of the African Methodist Epsicopal Church, which owned Baber Village, said federal officials specified that most of the project should consist of three-bedroom apartments. When the project was closed, overcrowing was cited as its chief cause of decline.

The federal government, however, did not always have final say on the projects. After 1968, they were the responsibility of Prince George's elected officials.

At that time, the Prince George's County Commission - the governing body that preceded the current County Council - passed a law limiting apartment sizes in the county and effectively banned large, federally-subsidized projects.

Then the commissioners started granting exceptions to this law.

One exception led to construction of the now rundown Nalley Apartments in Landover. In 1970, HUD approved the project. But the Model Cities Board of Prince George's County decided to veto it, noting that the project had few recreational facilities and would inevitably become overcrowed.

The county commission, however, had authority to overrule, the Model Cities Board. And two commissioners put pressure on the board telling HUD in a letter that the county had reversed the board's decision.

When the other commissioners found out, they quickly denounced the letter and it was withdrawn. But after it was sent, the Model Cities Board decided to compromise with developer Ralph Rocks. The Nalley apartments were built largely according to the original plans.

The two commissioners involved were Francis J. Aluisi and Jesse S. Baggett, who was later convicted of taking a bribe from Rocks in exchange for a favorable zoning vote on an unrelated matter.

Aluisi, now Maryland's chief building inspector, said he did not remember the incident. Baggett could not be reached for comment.

The problems resulting from poor planning were compounded when the projects were opened and rented.

To prevent deterioration - both physical and financial - HUD officers and county inspectors were supposed to inspect the buildings regularly. HUD officials were required to examine the financial reports of the owners every year.

But when it came time to force owners to make repairs, federal and county inspectors allowed one delay after another as the projects fell apart.

By October 1977, for example, conditions at Pumpkin Hill had already deteriorated to the point where hobos were living in vacant apartments and vandals were attacking walls and floors with axes.

But a HUD inspector who came to give the project its annual inspection spent, according to his own report, four hours at the project and four hours preparing his two-page report.

The report said no structural problems in the complex needed immediate attention, although it recommended that some repairs be made within one year. He also noted that "tenant care of all units was acceptable."

Prince George's County housing inspectors concede their departments may also have contributed to the decline of some projects throught lax enforcement of the county housing code.

Almost routinely, inspectors now say, owner were allowed to put off repairs that should have been made within 30 days of the inspection reports.

For instance, on Nov. 29, 1974, county inspectors cited Central Gardens owners for dozens of housing violations and gave them 30 days to make repairs. By June 1975, some repairs had still not been made, and more violations had been uncovered.

So county officials met to decide whether the project should be shut down. The result: the owners was given another month to correct the problems cited the previous November.

"We tried to give emphasis to maintenance on housing projects," says James R. Novak, head of the county's Licenses and Permits Department under former county executive Winfield M. Kelly Jr. "But it isn't really possible because politically and economically, the county cares about new development.

"Besides," Novak said, "when you supervise new construction, you can generate fees from permits and licenses and recapture the cost of the inspections. When you do housing enforcement, it's large drain on the general fund."

Apartment inspections were supposed to be coupled with scrutiny of the owners' finances, to ensure that the projects remained solvent and that was enough money for repairs.

But although HUD officials say they were more thorough in their financial supervision than in their physical inspections, a middle-level HUD official blocked an investigation of Pumpkin Hill's finances, which one of his subordinates had recommended.

In 1976, HUD records show, HUD loan officer Rudolph Bertang asked the comptroller General's office to review Pumpkin Hill's accounts. He said he had found questionable expense items listed, including the payment of thousands of dollars to a contracting company owned by Pumpkin Hill's developer, Ralph Rocks.

After a meeting with Rocks, Kenneth V. Long, housing management chief in the area office, stopped the investigation.

"I don't want to talk about it," Long said recently when asked about his action. "I just can't deal with it."

The end result of poor planning and neglect was disaster after housing disaster in Prince George's. The owners of four projects have defaulted on millions of dollars in federal loans. Baber Village has been closed down completely; five others have serious repair problems.

Now, in Prince George's and across the county, HUD is planning to spend millions to rehabilitate projects whose owners have defaulted. Federal officials believe it will be less expensive to rebuild dilapidated apartments than to raze them and start over.

HUD has devised a new program that offers an alternative to large apartment projects. Among its goals are encouraging low- and moderate-income tenants to find their own dwellings and then helping them pay the rent.

Prince George's County officials, for their part, have given up on federal programs. For several years they have regularly vetoed new subsidies for the old projects and have resisted HUD's efforts at renovation. They have also tried to keep new projects out of the county.

"It's a societal problem for Prince George's," Hogan said. "The projects create a density of people, all of whom are poor, and the problems actually saturate the whole environment they live in.

"The problem is going to transcend my administration," Hogan said. "And if I run for reelection in another four years, it will transcend that. Maybe 20 years from now we will have developed a solution for these projects.

"But for now, we're stuck." CAPTION: Picture 1, Abondoned, vandalized cars clutter the parking lot at Pumpkin Hill Aprtments; Picture 2, A flight of stairs separates Maria Hill from a flooded basement at Pumpkin Hill. Photos by Gerald Martineau - The Washington Post; Map, no caption, By Dave Cook - The Washington Post