President Carter declared a state of emergency at the Love Canal toxic chemical waste dump site in New York state yesterday, clearing the way for the evacuation of 710 families into temporary housing.

Pandemonium erupted at the headquarters of the Love Canal Homeowners Association near the Niagara Falls site when the word was relayed there by telephone. The 100 or so people present burst into tears and cheers, hugging each other and thanking God for deliverance.

"I just don't know how to feel," said Marie Posniak, one of the area residents who have been pushing for federal action since 1978. "I'm only looking forward to getting out of here, although a hotel room is no place to raise a family."

Association president Lois Gibbs called the declaration "a victory for the people."

The plan announced at the Environmental Protection Agency calls for the families, about 2,500 people in all, to be moved to hotels, motels or friends' and relatives' homes for as long as one year at government expense. The cost, estimated at $3 million to $5 million, will be split by the Federal Emergency Management Agency and New York state.

Residents began running out of the association meeting room before the announcement was completed in order, they said, to locate hotel rooms. The popular resort area has 5,500 rooms, but most are booked at this time of year.

"This action is being taken in recognition of the cumulative evidence of exposure to toxic wastes . . . and of mounting evidence of resulting health effects," said Deputy EPA Administrator Barbara Blum at a news conference.

Although no single one of the dozen or so health studies made so far would warrant the emergency declaration, Blum said, "in the aggregate they do suggest very serious health risks." She added that thorough long-term health studies would be made over the next few months to see whether enough substantial risks exist to justify permanent relocation. The term "substantial" will be defined later, she said.

In the meantime, EPA, FEMA and New York state officials, along with Red Cross workers, will immediately begin processing the families into new housing. Their current homes, where toxic chemicals have been found in the basements and in the air inside, will be sealed and the area closed, Blum said.

Area residents have filed more than $2 billion in lawsuits against the Hooker Chemical Corp. of Houston, which operated the site up to 1953, and its parent firm, Occidental Petroleum Co. The EPA is suing the companies for $124 million in cleanup costs, and Blum said relocation charges will be added to that suit.

"We feel these people should be compensated for this, not by the government but by Hooker," Blum said. "We think we'll collect."

Hooker has maintained that it sealed the site in accordance with the state of the art at the time and that it was later reopened accidentally by subsequent owners and Hooker should not be liable.

In a statement yesterday, Hooker said the EPA had little choice but to recommend relocation because its "precipitous and poorly handled" disclosure of a genetic effect study "has predictably caused panic to those living in the Love Canal area." Reiterating its noninvolvement since 1953, the company said the study proved nothing about genetic effects.

Federal action was prompted by a report last week of chromosomal damage among 11 of 36 persons studied by a Texas firm, Biogenetics Co. of Houston. Blum yesterday called that report "exploratory . . . not meant to be definitive," and said further genetic inquiries would be made.

Federal action had not been possible before this because of a lack of definitive information, Blum said. Another report of nerve problems, combined with the Biogenetics study, however, "made us feel it was the time to move these people out. The emotional climate, quite understandably, has been very high," she added.

Some area residents remained dissatisfied with the government action. "I want to get out permanently," John Wright told the Associated Press. "I don't like this 'temporary for a year.' I might be dead in a year."

Sara Herbert, president of the tenants' association at Griffin Manor public housing, where 210 families live, said she doubted the government meant what it said. "I'm not leaving until everyone else is gone," she said.

The residents had been rebuffed Tuesday night by the Niagara County Legislature, which in a stormy session punctuated by Love Canal homeowners' screams, voted 16-to-15 not to participate in an aid and relocation plan. Legislators explained that they preferred that the richer federal and state governments shoulder the financial burden.

FEMA Director John Macy told the news conference he expects no problems in handling the relocation, whch is small compared with ongoing work with flood refugees in the south, Cuban refugees in Miami and volcano refugees in Washington state. "We will seek supplemental funding," he said.