When the young Annadale teacher first heard that the federal government had recently increased its ceiling on FHA-insured mortgages, he thought his family finally could afford to buy a home.

Now he's not so sure. A higher interest rate of 13 1/2 percent accompanies the higher ceiling, and although he works two jobs to earn almost $30,000 a year he is not certain he can afford the higher monthly mortgage payments.

The Washington area was one of nearly 50 metropolitan areas from New York City to Los Angeles with high housing prices that were recently allowed by the U.S. Department of Housing and Urban Development to raise the limit on government backed mortgages from $67,000 to $89,500 and to increase the FHA interest rate from 13 percent to 13 1/2 percent.

Hud siad its actions were designed to make housing more affordable for middle-income families, like the one in Annandale, and to help the area's sagging home sales.

Local real estate boards reported recently that home sales in the area had dropped 19 percent in the first 10 months of this year because buyers were unwilling to saddle themselves with record high mortgage interest rates.

But officials of local savings and loan associations and mortgage banks, which make an estimated 75 percent of the home loans, said the new rates will have only a minimal effect -- for a variety of reasons.

Many agreed with Ronald Weismiller of Weaver Bros., a large mortgage banking company. He applauded the higher loan ceiling, but added, "at 13 1/2 percent you have taken a considerable number of people out of the market." More homes will qualify for the mortgages while fewer people will qualify to pay them, he added.

That's the plight of the Annandale family.

"We feel very discouraged," said the wife of the young teacher. The couple, who live in a cramped two-bedroom apartment with three small children, asked to remain anonymous.

"The higher mortgage ceiling does help us, but with the increase in interest rates we can't afford the monthly payments," she said. "You feel like you're in a pit and as soon as you get to the top someone throws another shovel of dirt on you."

The family needs a three-bedroom home; the cheapest one they can find, without moving to the outer suburbs, cost $80,000, she said.

The couple will have to carry a $75,000 mortgage. At the old interest rate, their monthly payments would have been $829, just for the principal and interest. Now that amount is $30 higher, according to their real estate agent, Kathy Felling of Long Foster in Springfield.

But while families need lower interest rates, lenders and sellers want higher rates.

"It's too little too late," said Barbara Lucas of Equitable Savings and Loan Association, who expressed the opinion echoed by many local lenders. a

"Interest rates on conventional mortgages went from 14 to 15 percent while FHA went from 13 to 13.5 percent," Lucas said. "You're talking about 1.5 percent below the market," and sellers must pay that difference, which could be as much as $9,000 on the maximum $89,500 mortgage.

The lenders said they believed few sellers would be willing to pay the additional money.