A Greenbelt couple lost their bid for an FHA-backed loan for their new solar home because it lacks what the Department of Housing and Urban Development called a sufficient back-up heating system. But their neighbors, with a nearly identical house, were able to get VA financing for theirs.

The dichotomy has made Robert J. Spear, who has secured a conventional loan for the house, anxious to get the FHA to change its rules for future homebuyers. "I think this house is the way we ought to be going nationally, which is why I'm so upset about what the FHA is doing," Spear said.

It turns out that the FHA is anxious to change its rules, too, according to Philip Abrams, HUD's assistant secretary for housing. Rejection of the Spear house for FHA mortgage insurance was proper under current HUD regulations, Abrams said, but they are regulations he would like to see changed.

"In a case like this, it's inappropriate for HUD to have standards that are superimposed over local standards," Abrams said. "But those standards now exist and our efforts to deregulate are being opposed by Congress."

HUD proposes to defer to local building codes in cases like this but a housing authorization bill reported out by a House subcommittee this week would prohibit HUD from doing so, he said. "Prince George's approved the design as sufficient, and since it has an adequate building code, that should be adequate for HUD," Federal Housing Commissioner Abrams said.

Spear and his wife and three children moved into their passive solar dream house on Nov. 10 and have found the house everything they hoped it would be, Spear said. The family has spent a total of about $190 so far on coal for the coal-burning stove which serves as a back-up for the natural heating provided by the sun and the design of the house.

The design of the cedar-sided three-story house, in a wooded area of Greenbelt, is called a "double shell" or "envelope" home. It's essentially a house within a house, Spear explained, with the inner house or cocoon insulated from the outer shell.

The back side of the house, facing south, has a double wall of glass most of the three stories, with the inner wall of glass about a foot from the outer wall. A large sunspace is created between the two walls of glass, which is open from a crawl space beneath the basement to the attic. In addition, a 20-inch by 20-inch air shaft runs down the north wall of the house connecting the attic to the basement.

The design thus creates an envelope or wall of warm air between the inner and outer walls which wraps around the inner house on four sides--the south and north walls and the top and the bottom. The envelope of warm air heats the inner house by radiant heat transfer during the day and protects it from excessive heat loss during the night.

Spear said the warm air rises to the attic along the south side of the house; when the warm air gets to the attic, it kicks on a blower, which sends hot air to north side of house.

The house has other passive solar features. The house is heavily insulated--at least double that of a conventional house. All the glass is thermal-pane and all the windows and doors are caulked and sealed. There is also as little exposure on the north side of the house as possible; there are few windows on the north and east sides of the house and no windows on the west side. In addition, outside overhangs on the south side of the house permit the sun to stream in during the winter but keep it out during the summer.

The coal stove, whose heating capacity exceeds the design requirements of the house, is located at the bottom of the open basement staircase, where its heat is most easily distributed throughout the house, Spear said.

"Even without the coal stove, the house never gets real cold," he said. Because the temperature of the earth under the crawl space is 56 degrees, bonding between the envelope and the earth ensures that the inner house--and the pipes--won't freeze, even when no backup heat is on and the house is unattended, Spear said. Returning from a week's vacation during the area's coldest weather this winter, they found the house temperature to be 53 degrees, he said. On Monday morning, when it was cold and blustery outside and the coal stove wasn't on, the temperature on the middle floor of the house was 71 degrees.

The envelope design was originally developed by Lee Porter Butler, a San Francisco architect; the Spear's house was designed and engineered by Craig Stewart, a Columbia, Md. architect who specializes in solar work. Acting as his own general contractor, Spear had the shell constructed but did a significant amount of the construction himself.

The house has about 3,000 square feet of space; there are four bedrooms and several large living areas including a combination kitchen and family room, a large living and dining room, a den, the solarium and several basement rooms. The basement is ground level at the back of the house.

Spear had applied for a $76,050 FHA-guaranteed loan through the Navy Federal Credit Union. "I had already built the home but was looking for permanent financing to pay off the construction debts, to consolidate and finish up construction," he said. He already had recieved a $14,500 loan for the solar features of the house from the state of Maryland under its residential energy conservation loan program.

FHA rejected the loan guarantee, calling the "small coal stove insufficient for solar backup system." After Rep. Steny Hoyer (D-Md.) wrote HUD on Spear's behalf, a HUD letter said that the house failed to meet HUD's minimum property standards. The standards require a self-contained heating system of sufficient capacity to heat all rooms in a house to 70 degrees in cold weather using guidelines established by the American Society of Heating, Refrigerating and Air Conditioning Engineers. The standards are designed to assure health, safety and human comfort, one member said.

(Spear noted that it's illegal to set a thermostat in government offices that high; temperatures are supposed to be maintained at 65 to 68 degrees.)

After FHA rejected his application a second time, Spear applied for and received a $100,000 conventional loan, about the total cost of the house, from Baltimore Federal Savings and Loan Association.

Although Spear and his wife, who both teach at Prince George's Community College, gave up on their FHA application as "a lost cause," Spear says he wants to be a "prod" that will help change HUD's rules.

So, it seems, does Abrams. "My concern is that the local community should be able to establish health and safety standards," he said. "Only in the absence of a local code should HUD interject itself."

Abrams said the test for HUD should be whether or not the agency is taking an insurance risk should it have to take title and sell the house. The decision of his staff wasn't made on the basis of whether there was an appropriate underwriting risk, but whether there was sufficient back-up heat. "The issue my staff responded to was whether minimum property standards allow it, and they don't," he said.

If a request for a waiver had come to him, he would have looked beyond the minimum property standards to evaluate the underwriting risk, he said, adding "I'm sorry it didn't come to me." CAPTION: Picture 1, The view from the dining room of the Spear's house. Spaces between the boards along the wall allow air to circulate. Picture 2, Robert J. Spear sHA l0oan on the house because it has no central heat. Picture 3, This winter, $190 for coal for this heater was Spear's only fuel cost.Picture 4, Spear's solar house in Greenbely has double-wall construction. Photos by Ray Lustig -- The Washington Post