Treasury Secretary W. Michael Blumenthal said last night that the administration is willing to consider changing the kinds of loans it gives New York City if the city is willing to balance its budget within three years.

In remarks prepared for delivery to the New York Board of Trade, Blumenthal said that greater involvement by the state is also needed.

"The Carter administration and Congress must be convinced that your state has fully used its ability to provide fiscal aid to the city before we continue a major federal lending role." Blumenthal told the audience.

The federal government now provides New York City with up to $2.3 billion in seasonal loans to tide the city over its cash-short periods, but the loans must be repaid by the end of each fiscal year. The seasonal program ends June 30, 1978.

President Carter has said he would be willing to continue some form of seasonal program, but city officials have argued for different kinds of loans that do not have to be repaid at the end of each fiscal year.

Blumenthal met with state and city officials last week, but his remarks last night were the first public indication that the administration is willing to expand its role in New York City. The administration hopes to recommend a program to Congress by the end of January.

But Blumenthal said the administration would insist on conditions before even agreeing to extend the seasonal financing arrangements.

He noted that New York must "get into a condition of recurring budget balance by the end" of the next three-year period. The budget is in technical balance, but only because $600 million of operation expenses are carried in the capital budget. All operating expenses must be phased out of the capital budget within three years, he said. Blumenthal said a strong financial review mechanism must be continued to maintain a "credible and responsible" position for the city.

He also said that a new financing plan must be developed during the next few weeks. While a central feature of that plan will be Treasury financing, Blumenthal said "a key to its credibility" will be how well the plan "satisfies those needs which are not accommodated by Treasury."