Fairfield Homes, a family-run home builder based in Woodbridge, has partially curtailed operations -- laying off employees, notifying recent home buyers it will no longer make repairs and closing sales offices -- while it renegotiates loans with its lenders.

In a letter sent recently to its new home buyers, the company said it has been forced to "discontinue operations, including all customer service work" because of the downturn in the Washington area real estate market and the credit squeeze by lenders.

A spokesman said this week the company is not shutting down. "Fairfield is still open for business and still accepting contracts," said Ronald S. Shapiro, a lawyer for the company who is negotiating with four lenders on restructuring Fairfield's debts.

Fairfield is one of a number of Washington area builders facing such troubles. Stephen G. Finn, managing partner of the Washington office of Kenneth Leventhal & Co., a real estate accounting firm that represents builders and lenders, said many builders underestimated the length of the slump and, thus, have few reserves built up to pay interest on loans and other costs needed to weather the deep decline in sales that has resulted.

To make matters worse, tightened lending restrictions have made it more difficult to borrow more money from banks and savings and loans.

"When we started the cycle, we believed it would turn around quickly," Finn said. When it didn't, it has left builders in recent months "with their backs against the wall" and at the mercy of their lenders, Finn said.

Drewer Development Corp., a small Reston home builder, recently shut down and laid off all its employees, according to former employees. And Tipco Homes, a luxury home builder also based in Reston, sought protection from its creditors last month by filing for protection from its creditors under Chapter 11 of the federal bankruptcy code.

Milton L. Drewer, Drewer Homes president, could not be reached for comment. However, former employees, who requested anonymity, said Drewer's 18 remaining employees were laid off in mid-December and that Drewer is selling off the houses it had built as model homes in four Northern Virginia developments -- Ashburn Farm, Cascades, Centre Ridge and Fairfax Station.

Former Drewer employees said they had been told that Drewer was encountering difficulties with its lenders and that Milton Drewer hopes to reopen the business. "He's trying to hold it together," said one former employee.

At Tipco Homes, company founders David Counts and John Tipton have laid off all their employees except for their bookkeeper, according to a source familiar with the company. Tipton declined to comment, referring calls to Tipco's lawyer, C. Thomas Hicks III, who said filing the bankruptcy petition "was essential to our attempts to work out problems with our lenders. It may be that other entities {related to Tipco} will file Chapter 11" petitions.

At one point, Tipco was selling houses in 19 locations, but real estate consultants and other builderssay Tipco's high-priced homes were hit hard by the real estate slump. Its homes in Wellington, a planned development in Prince William County, cost from $350,000 to $400,000, for example, while its homes in Cascades cost about $500,000.

At Fairfield, phones at 11 of its sales offices in Virginia and Maryland had been disconnected as of midweek. Fairfield's sales offices in Reston and Sully Station in Fairfax County were open last weekend, and calls to its sales offices in Virginia Run and Crosspointe, as well as in Fairfax, are being forwarded to Fairfield's Sully Station sales office.

Fairfield's sales offices at Kentlands, a newly opened planned development in Gaithersburg, were open most of the week, although they were being staffed by an employee of the Joseph Alfrandre Co., Kentlands's developer.

At its peak, Fairfield sold more than 300 houses in one year in the Washington area. It opened a division in Florida and, after watching NVR L.P., a McLean home builder, make its splashy public offering in 1986, company President John V. Neill Jr. talked of taking his company public, too, according to other builders.

But the 18-month-old slump in home sales has taken its toll and, like other builders, Fairfield had to make an abrupt adjustment to lower sales just as it had started additional projects. In the first three quarters of 1990, it sold 112 houses in 16 developments.

Last week, Fairfield sent out the letters to its new home buyers, telling them that because of the economic downturn, it would be unable to provide its usual customer service. The services will be covered under the warranties that Fairfield offers with each home it sells, according to Shapiro.