Reference a good, detailed repair manual; Chilton, Motor, Haynes - for the replacement steps. The instrument panel must be removed for access to the heater core.
Try this website for details; www.autozone.com/repairguides/Volvo-240-740-760-780-940-960-1990-1998/HEATING-AND-AIR-CONDITIONING/Heater-Water-Control
Try these on-line resources for the replacement parts: www.autopartswarehouse.com, www.partsgeek.com, www.rockauto.com, www.partstrain.com - to list a few.
For example, they (RockAuto) list the replacement heater core from around $58.00 for your vehicle.
Heater core = SPECTRA PREMIUM / COOLING DEPOT part #94734 - or it's equivalent