Many poor families in rural West Virginia live in unsafe, unsanitary structures that do not protect them from the elements, but these families are not considered officially homeless. Lincoln and Clay Counties are very rural, traditionally poor areas, with 45% of their populations receiving welfare and much larger proportions receiving food stamps. Interviews with 82 poor families and local officials and community workers in the two counties revealed that: (1) much of the available housing is substandard; (2) poor families cannot afford safe and decent housing; (3) entire families live nomadic existences, moving from one substandard house to another; (4) bad water places families at risk in other areas of their lives; (5) families living in substandard conditions have high rates of illness; (6) children living in substandard conditions have a high rate of school failure, or are "gray area" students (in need of help but not eligible for special education) and allowed to move through the school system without learning; (7) the state's Landlord-Tenant Act does not protect poor families who take what shelter is available; (8) the Department of Housing and Urban Development (HUD) subsidizes substandard housing with taxpayer money; (9) the State Department of Human Services does not recognize substandard housing in making homelessness funds available; and (10) existing programs that provide weatherizaton supplies or pay utilities do not address these problems adequately. The report makes recommendations concerning state housing and water standards, the issues of land ownership and unemployment, investigations of state programs and use of HUD funds, local planning, and possible resources. (SV)