Ted and Patricia Tomczyszyn's search for the perfect home led them to an abandoned brick house at 2720 13th St. NW, where more than a decade of decay lurked behind broken windows and plywood boards.

The Tomczyszyns studied the peeling paint and imagined one day passing the property on to children and grandchildren not yet born. Priced at $250, they explained, the nightmare on 13th Street has the makings of a dream house.

The row house in southwest Columbia Heights is one of a series of boarded and burned-out houses that are being offered for sale through the D.C. government's long-delayed homestead program.

Seventeen months after Mayor Marion Barry signed emergency legislation authorizing the program, the Department of Housing and Community Development has put 16 single-family row houses up for sale to first-time home buyers who make a commitment to rehabilitate them and live in them for at least five years.

Officials said they plan to spend $2 million before Sept. 30, when the fiscal year ends, to help 200 low- and moderate-income families rehabilitate homestead units.

As many as 200 additional units could be offered to buyers who can afford to finance extensive improvements without the agency's support.

In the three weeks since the Homestead Program Administration publicized the first set of houses, which it describes as a test of the system, more than 10,000 people have picked up applications, and hordes of would-be home buyers have turned out to inspect long-neglected places.

The names of qualified applicants will be entered in a random drawing tentatively set to take place in March, according to Lynn French, deputy administrator of the program and chief author of the 1986 law that established it.

Modeled after similar projects in other cities, such as Baltimore, the program is designed to advance urban renewal and to make home ownership a possibility for residents who would otherwise remain locked in the rental market, French said.

Under the 1986 law, the District government gained the power to take over titles to tax-delinquent properties not sold at semiannual tax sales and to sell them to homesteaders for $250.

Homesteaders assume responsibility for all future taxes and agree to shoulder renovation costs, which in many cases are expected to run into the tens of thousands of dollars.

An average of 200 to 300 properties are not sold at each tax sale. Several thousand other housing units throughout the city have been abandoned, many of them since the riots that followed the assassination of the Rev. Martin Luther King Jr. in 1968.

Thomas Sahr, chairwoman of the Southern Columbia Heights Tenants Union housing committee, said that many of the city's boarded-up houses are "shooting galleries" for drug addicts. The Homestead Program could help alleviate the drug problem in D.C. neighborhoods, he said.

The 16 houses currently for sale include buildings that belonged to the Redevelopment Land Agency and others that were signed over to the government by the owners, rather than being tax sale leftovers. They are located in the Columbia Heights area, the Shaw Urban Renewal Area and in parts of Northeast and Southeast Washington.

In the current batch of houses, 12 are being offered for $250 apiece. Three additional houses for sale are in almost livable condition and are priced at $35,000 to $47,000, while another, which needs a significant amount of work, is priced at $27,543.

One house, at 925 S St. NW, was gutted by fire and will cost an estimated $75,000 to $95,000 to restore. The house that the Tomczyszyns visited on 13th Street, a large 6-bedroom home, requires $75,000 to $140,000 to bring it into compliance with city codes and make it habitable, according to architects hired by the Homestead Administration. The roof, plumbing and electrical systems must be replaced and the interior needs an overhaul.

Another house on the block, which is bordered by Girard Street on its north side, recently sold for about $120,000, according to a local real estate agent.

"It's not a free lunch," said Ted Tomczyszyn, who works for a law firm. But, he added, "We're young. We have the time to put into it. I wouldn't feel bad about putting five years into a house to make it just the way I want it."

"It would be very gratifying," said Patricia Tomczyszyn, a systems consultant for Wang Laboratories Inc.

Other potential buyers who visited the three-story bay-front house considered by the Tomczyszyns expressed skepticism. "It could be a money pit," said Greg Hall, a Washington contractor who specializes in renovations.

For the inexperienced homeowner, "it's harder to {rehabilitate} than to just go out and get a regular house," Hall said.

Although the information packet distributed by the Homestead Administration advertises an opportunity for low-income District residents, housing activists and others questioned whether the costs of participating in the program would exceed the reach of many such people.

French said the program requires motivated buyers and said it is not intended for the poor. "It's geared for those in-between people, those everyday working people who don't benefit from governmental programs normally," she said.

To make the challenge more manageable, the Homestead Administration plans to offer low- and moderate-income buyers loans of up to a $10,000 that would not have to be paid back until the home is sold.

All homesteaders also will be required to participate in a training program covering such topics as hiring contractors and securing financing.

At least half of the properties under the homesteading program are set aside for low- to moderate-income buyers, whose incomes do not exceed $25,560 for an individual or up to $45,600 for a family of 8. The remainder of the properties are geared toward buyers who can afford costlier renovations.

Would-be buyers can specify up to three properties that they would like to win the right to buy through the lottery. Applications for the first round of houses are due by Feb. 10. Officials said it is too early to tell how many people are serious about becoming homesteaders or what percentage of the applicants meet the program's standards.

Within two months, French said, the Homestead Administration plans to offer multifamily buildings for sale to tenants' groups or nonprofit organizations.