Chabad of San Francisco hopes to dig out from under years of financial woes by raising $755,000 — enough to pay off the mortgage on its main headquarters and even renovate the property.

"This will give Chabad the permanence and security to continue our outreach from a place of strength," said Rabbi Yosef Langer, Chabad's executive director.

Of the total to be raised in its so-called "burn the mortgage" campaign, about $637,000 would go toward the mortgage, back taxes and legal fees for the property at 2950 Anza St. in the Richmond District, where the Langer family lives, conducts services, offers classes, and feeds and houses Shabbat guests.

The rest will pay for renovations to the three-story home that include expanding the space used as a synagogue and construction of a "body-and-soul retreat" on the first floor. The retreat center would include a mikveh, sauna, wine cellar and "kosher massage" with separate areas for men and women.

Langer considers the retreat center a tool to attract more Jews to Chabad House. "If you have a shvitz [sauna area] and a place for massage," he said, "that can open up the door to Jews who aren't connected to their Judaism."

In its campaign, however, Chabad will have to clear a potentially major hurdle: It must convince potential donors the organization has overcome an admittedly poor record of financial management that has seen recurring budget deficits and foreclosures on two homes.

"My Achilles' heel has always been financial management," Langer said.

Although Chabad is an international organization for Lubavitch Jews, it does not fund individual Chabad Houses. Langer, like all other Chabad directors, relies on local fund-raising to cover his operating expenses.

It was the foreclosure on the Anza Street house and a recently settled lawsuit that led to the new campaign.

When the Langers bought the Anza Street home for $690,000 five years ago with a $100,000 down payment from the rabbi's mother, they were behind in mortgage payments on the house they were already living in.

Hinda Langer, the rabbi's wife, said they hoped to rent out the new home for a while and eventually move into it.

What happened next has become a matter of dispute. According to the Langers, the real estate agent misrepresented the rental income as significantly higher than it actually was and also promised to sell their first home. The family decided to move into the Anza Street home and soon afterward lost their first home to the bank.

"It was a nightmare," Hinda Langer said.

In 1993, the Langers sued the former owner, the real estate agent and the two companies the agent represented, and sought financial damages for purported fraud and misrepresentation. After they filed the suit, a Superior Court judge suspended the Langers' $5,300 monthly mortgage payments to the home's former owner — with whom the Langers had taken out the mortgage.

The lawsuit was settled this summer. The Langers did not lose the house and received $31,000 in the settlement, but the money went to legal fees. In addition, the Langers must refinance the property by May 1996 and make a one-time payment of $500,000 to the former owner.

Chabad of San Francisco's second site, a rented space at 468 Bush St. in the Financial District used for offices and religious purposes, isn't part of the fund-raising effort.

Chabad has set a self-imposed deadline of 1998 to raise the entire $750,000. But the organization is already one-third of the way there.

George Zimmer, president of the Men's Wearhouse chain based in Houston and Fremont, already has promised $125,000 in cash and another $125,000 to match others' donations.

Other Jewish supporters in the Bay Area have also stepped in to help.

Hal Dryan, president of the San Jose-based First National Mortgage Co., is the campaign's treasurer. He is also ready to offer Chabad a mortgage worth $375,000 if needed.

"Hopefully, it won't be necessary if they raise enough money," Dryan said.

Aware of Chabad's previous financial difficulties, Dryan said he wants to help Langer in any way he can.

"I just believe in what he does. He's a tremendous value to this community," Dryan said. "I think it just goes with the territory with Chabad: They just never have enough money."

Meanwhile, Langer said he wants to use this campaign to turn over a new leaf in budgeting and fund-raising for specific programming.

That's what convinced Sandy Leib, a former lay leader with the S.F.-based Jewish Community Federation and a professional fund-raiser, to work as a consultant to the campaign.

"He has come around to the point where he understands that he needs to have a financial structure and a budget," she said. "It's taken a lot of pressure from his supporters."