Fred and Ruth Weamer are moving into their dream home this week. It sits atop a hill in Frederick County, looking over rolling hills and peaceful pastures where diary cows graze.

Fred Weamer is putting the finishing touches on the three-bedroom, Cape Cod style house. He built it himself because "I had definite ideas about what we wanted, and the only way to get it is do it yourself."

It's "a good house. We didn't skimp on anything," he said. Weamer figures he could sell it for $5,000 to $8,000 below market rates and still make a profit.

The Weamers are among a growing number of families who built all or part of their own houses. For the Weamers it was a way to reach their "ultimate goal" of having a house of their own design. For others, particularly young couples and first-time buyers, a partially finished structure is the only way they can afford a home in these times of high prices and high interest rates.

In the real estate world the buyer's investment of labor is known as "sweat equity."

When the Weamers moved back to the Washington area after several years in the Midwest, they bought such a house in Mount Airy, paying $49,900 for it. They moved into the ground floor of the 950-square-foot house, while Fred Weamer turned the second-floor shell into two "quite substantial" bedrooms at an estimated cost of $1,800.

When their new home was finished two years later, they sold the Mount Airy house for $51,000. While they did not make a profit, they did "gain equity and tax benefits," Fred Weamer said.

Ann Mokry, an accountant in Damascus and part-time real estate sales agent, bought a house with an unfinished upstairs "because it was all I could afford . . . The upstairs had no floor, ceiling, walls, electrical wiring or plumbing."

Within a year, she had saved enough money to turn the second floor into two bedrooms and a full bath. With the help of friends, she completed the work in about a month, she said. When she finished, Mokroy had a three-bedrom house with two full baths and a full basement. The exterior dimensions are 24 by 26 feet, and the interior about 620 square feet per floor. It cost her the original purchase price of $50,150 plus $4,000 worth of materials for the upstairs work.

She has just sold the house because she plans to be married soon, getting "very close" to her asking price of $59,900. Of building part of her home, she said, "I think I would do it again.It was a fun process and I learned a lot."

Some builders now tailor sweat equity purchase plans for buyers who might otherwise be squeezed out of the housing market entirely, particularly young families and singles buying their first homes.

This group made up a slightly larger proportion of home buyers in 1982 than in the year before, according to a survey made by the Chicago Title Insurance Co. Just over 40 percent of all home buyers in the nation during 1982 were purchasing their first homes, and paying a median price of $58,900, less than first-time buyers paid the year before. In 1981 these purchasers paid a median price of $63,180 and made up 39.4 percent of all buyers. The Chicago survey used 1976 as a comparison, reporting that 44.8 percent of home purchases in that year were first-time buyers who paid a median $37,670.

Another characteristic of sweat-equity houses is their size, significantly smaller than the median size of all houses built. The first home the Weamers bought in Mount Airy was, at 850 square feet, only twice as large as an average two-car garage. The National Association of Home Builders has reported that the median size of one-family houses built in 1982 shrank for the fourth year in a row, to 1,520 square feet, 30 square feet smaller than the 1981 median.

A Washington area company, Minan Development of Frederick County, said about 65 percent of the buyers of its sweat-equity houses are first-time buyers, and another 10 percent are retired people.

Minan specializes in "little and cute" houses in several styles -- Early American, Cape Cod, Victorian, among them -- and already has sold 50 partially finished houses in a New Market subdivision, according to Bob Hilton of Minan. The firm expects to build another 250 homes in the subdivision, he added. The houses range in size from 896 square feet to 1,312 square feet, and are priced from $59,900 to about $70,000 for a completely finished house.

Minan will build homes within a 20-mile radius of New Market, in the Counties of Frederick, Carroll, Howard and Montgomery. The company has not yet built a home in Montgomery, however, in part because "you feel like a rat in a maze when you try to get a building permit" in the county, Hilton said.

Higher land prices in Montgomery and other communities close in to Washington make it difficult to build partially finished houses at the low prices first-time buyers and retirees look for, he said. His company would have to price its least expensive homes at $70,000 in Montgomery County, about $10,000 more than the same houses cost in Frederick, Hilton added.

Another builder, Frall Development Co., has built and sold about 75 partially finished homes in Frederick and Carroll county subdivisions so far this year, said a spokeswoman. In most of the homes the upstairs is unfinished. Prices start at $48,000 and the average size is 1,000 square feet, she added.

A New Jersey developer is building "convertible" town houses in Frederick designed for the average first-time buyers. The houses have a finished first floor containing a living room, dining room, kitchen, bedroom and bath on 676 square feet, plus a stairway. The second floor, large enough for two bedrooms and a full bath, is unfinished.

the price is $43,490, plus a monthly maintenance fee of $52.12 to cover the costs of maintaining and operating recreational facilities, grounds, exterior of the buildings, and other common areas, said Paul Biciocchi, a representative of the builder, The Companies of Crestwood. The cost of materials to complete the second floor might range from $4,500 to $6,000 depending on the owners' tastes, said Biciocchi.

Ryan Homes Inc., which is based in Pittsburgh and which is one of the biggest developers in the nation, has an "owner-builder" program in which the purchser is responsible for obtaining permits, clearing and excavating the lot, and other work, plus the finishing of one level, usually the lower. The buyer may do the work himself or subcontract it, and cannot move in until the house is finished. The prospective home buyer may provide his own land, or Ryan will help find a lot, said a spokesman for the developer.

Ryan has developments in all the Washington suburbs, a spokesman said. A construction loan pays for erection of the house and is paid off by the permanent loan when the house is completed, he said. Prices range from $23,400 to $40,600.

The condominium equivalent of a do-part-of-it-yourself home is known as an "as-is conversion." Several have taken place in the Washington area, as more and more apartment buildings have been converted.

In most cases, a purchaser gets a cleaned and painted apartment, with the existing appliances, kitchen cabinets and bathroom fixures. The equipment is put in working order and damage is repaired by the developer.

"As a practical matter, in order to enable purchasers to obtain regular mortgage finance, you have to put the unit in living condition and fix up the common elements," said John K. Hoskinson, whose company specializes in as-is conversions.

Buyers can take the apartment completely "as-is" or can buy any of several renovation packages, said Hoskinson.

"We realized the logical breakdown was by room, so we began offering a complete renovation of the kitchen as a single package, for example, and a complete upgrade of the bathroom as a separate package," Hoskinson said of his company's early as-is conversions.

He estimated that 65 percent of the buyers in conversions his firm has handled took the apartment as is.

Two of Hoskinson's recent conversions are the Schuyler Arms, in Adams-Morgan, where prices range from $27,400 for an efficiency apartment to $47,900 for a one bedroom to $77,500 for a two-bedroom unit. In the General Scott apartments at Scott Circle, prices range from $28,900 to $64,600.