Jose Galvez was the first client to see the counselor at Housing Counseling Service Inc. Tuesday, and like so many others he was looking for an affordable apartment in the Washington area.

Jose is 13 years old, a smiling boy from Guatamala who has taken on the chore of finding a place for himself and his mother. They have moved four or five times in the past 1 1/2 years and now share a one-bedroom apartment in the Adams Morgan area with a woman. They need a bigger place but can barely afford the $75 a month they pay now because Jose''s mother recently lost her job.

In Prince George's County, another woman found she could not meet the mortgage payments on her bank teller's salary alone after her husband abandoned her and her 11 children. The Department of Housing and Urban Development said it would not take her FHA-backed loan into its assignment program, designed to help persons in default due to circumstances beyond their control, because her husband's leaving was a voluntary act on his part.

The Mata family, meanwhile, is hoping to buy their first home. Having fled El Salvador four years ago, they look forward to the freedom and stability of homeownership here.

The three adults all work, but with two small children it has been difficult to find an adequate apartment--the ones they have found either are too small, too expensive or won't take children. But it proved just as hard to find a house they could afford to buy, and the process of looking was further complicated because none of them speaks English.

All of these people brought their particular housing problem to a second-floor office near 18th Street and Columbia Road NW, where the non-profit Housing Counseling Service provides its free service to low- and moderate-income families. Between 130 and 150 clients come through the group's doors every month, most of them needing help with a mortgage in default or with finding a place to live they can afford. Others seek aid in fighting evictions or need help in buying and maintaining a home.

In the past, the organization has been funded equally by HUD, the District government and United Way, said Sister Kate McDonnell, founder and director of the counseling service which has two offices and seven counselors. It is a HUD-approved agency and as such gives advice and assistance to persons who default on FHA loans.

Federal funding has declined, however, and the Reagan administration wants to eliminate money for housing counseling entirely, saying that local funds should be used instead. Two years ago more than 400 counseling agencies nationwide received HUD funding, according to the House manpower and housing subcommittee, but that number has dropped to 135. In the Washington area, there are now 19 agencies approved for housing counseling, not all of them funded.

McDonnell said federal funding at her agency dropped from $50,000 to $5,000 last year. This is due to go up to $25,000 this year, but it is questionable whether there will be any more federal money after that, she said.

Proponents of housing counseling argue that HUD loses an average of $12,000 on each foreclosure of an FHA-insured home and that HUD actually could save money by putting more funds into housing counseling and efforts to work out repayment plans with defaulting homeowners.

McDonnell said that last year the Housing Counseling Service helped keep 120 Washington-area families out of foreclosure, 98 percent of them FHA-insured. She estimates this saved the federal government about $1.4 million in losses.

With unemployment soaring and mortgage delinquencies at record levels, the counselors say their work load has increased--and the type of client they get has changed.

"Since January, I've been seeing more and more people who make more money than I do," said counselor Theresa Hill, who says her salary is about $14,000 a year. "They might have $30,000 combined in income , but if they bought last year at 18 percent interest rates, they may find now they can't afford it."

When an FHA mortgage is in default for at least 90 days, the lender can request that HUD put the mortgage into the government's assignment program, and the homeowner may appeal if HUD denies a request. At this point, the housing counselors may become involved if the homeowner knows about the counseling program. If HUD accepts assignment, the lender is paid off, HUD takes over the mortgage and the buyers work out an arrangement with HUD on paying back all they owe.

The percentage accepted for assignment appears to be declining after rising steadily in the late 1970s: of 22,218 requests in fiscal 1981, 5,043 were accepted for assignment; so far in fiscal 1982, 20,382 requests were made and 2,708 accepted, according to HUD.

At the Housing Counseling Service, no cases have been accepted by HUD for assignment in "well over a year," Hill said, even though the agency has put in appeals for hundreds of clients.

To be accepted, homeowners must show that the default was due to circumstances beyond their control, such as being laid off a job, and that there is a reasonable expectation that they can pay what they owe within three years. It has always been difficult to prove a client meets both these criteria, but HUD has become more stringent and demanded more documentation since the Reagan administration took office, Hill said.

"In the past, if you said your husband died, they just believed you. Now you have to get a death certificate and a hospital report or if someone was killed, a police report," Hill said. "People have to take off work to do this. Usually we split things up" between client and counselor, she said.

In the case of the woman with 11 children, HUD wanted--among other things--supporting documentation that her husband had abandoned her and an explanation and documentation of a previous 30-day default in 1979. She was given less than three weeks to respond. "I sit up at night wondering what kind of documentation I can get to prove these types of things," Hill said.

Asked why the counselors go through all the effort if all of the requests and appeals eventually are rejected, Hill explains: "I tell my clients they can't depend on HUD. We go to them because it buys us time."

A lender cannot start foreclosure proceedings while a homeowner is asking to be accepted in the assignment program. It may take six months for the rejection finally to come through, and that gives the client time to consider alternatives, Hill said.

If assignment is turned down, the lender may start foreclosure proceedings. The counselor then usually goes to the lender to try to work out an arrangement for repayment, and Hill said lenders generally have cooperated in the effort. If clients simply cannot handle repayment, they may try to sell the home themselves to pay off the mortgage, but this option has become more difficult with today's high interest rates that have put homebuying out of the reach of many.

As a last resort, an owner may file for bankruptcy which stops the foreclosure but also carries the penalty of a bad credit rating, Hill said.

Despite the problems, the counselors see only one or two cases a year go all the way to foreclosure, Hill said. The counselors try to get the clients to look to families and friends for help, and more of them are doing that now, she said.

A problem at least as difficult as stopping foreclosures is helping lower-income people find decent, affordable housing.

Alberto Gomez handles the cases of Spanish-speaking persons, such as young Jose' and his mother. When the boy came in for help, Gomez was able to give him some suggestions on places he and his mother could look.

"They have the whole gamut of problems," Gomez explains. She is unemployed now, and Jose' often stayed home from school just to protect the apartment from robbery in the high-crime area where they live. They have access only to the living room of the two-room apartment, but pay more than half the rent.

Gomez does the groundwork in trying to find them a better situation, talking with the landlord first and telling him what kind of a family needs housing. He emphasizes that the tenants must be responsible if the agency is to continue helping them.

"I am rather strict with the tenants. I say I can't recommend them to a landlord if they don't pay their rent," Gomez said.

Gomez also counseled Lucia and Jose' Nicolas Mata and her sister, Daisy Perez, about buying a home together for themselves and the Mata's two children, Noel, 2, and Ruben, 3 months.

The Mata family is among the first to be looking into a new homeownership program the housing agency is starting. Under the program, a newly formed non-profit group associated with Housing Counseling Services will buy abandoned and dilapidated homes, rehabilitate them and sell them to moderate-income persons at cost.

The group hopes in this way to create affordable homes of all kinds at a price of perhaps $40,000 or $45,000 for families that come within certain income guidelines.

With Gomez translating, Lucia Mata explains that the family has never owned a home but wants to buy so they "can live without restrictions and they cannot be evicted," though they say they have never been evicted in the four years they have lived here.

Helping families like the Matas make a move away from the Hispanic community that has formed in Adams Morgan takes special planning, Gomez indicates.

"It is difficult to get Hispanics from this area to move to other areas of the city. This is the neighborhood, but the community is having to move out," he said. "This move will really be taking them into the United States."