Officials of the Episcopal Diocese of Washington and the District government broke ground Sunday for a 140-unit subsidized elderly housing project in Foggy Bottom, calling the project a "miracle" and the fulfillment of a longtime dream.

The St. Mary's Court apartment project, at 725 24th St. NW, was described by Mayor Walter E. Washington as "a miracle before your eyes" and by the Right Rev. John T. Walker, Episcopal bishop of Washington, as only the beginning in the church's ministry of providing housing for "the elderly, the poor, and the disadvantaged."

More than 200 persons filled the backyard of St. Mary's Episcopal Church for the groundbreaking, despite threatening clouds, a stiff wind, and airplane noise that drowned out speakers every few minutes. For many, the groundbreaking was the culmination of a years-long effort to build low-income housing in an increasingly affluent area.

The $4.2 million housing project will replace a 20-unit Depression-era federal project on the site that was torn down five years ago. Although George Washington University and other private groups sought use of the city-owned land. St. Mary's Church and the Episcopal diocese prevailed with their plan for a nine-storey apartment building for the elderly.

A non-profit diocesan corporation is receiving a direct laon from the Department of Housing and Urban Development to build the project on land the city is leasing for 40 years. George Washington University has promised to help by staffing a special professional services center in the building, which will provide medical, legal, and other social services to elderly persons in the project and the community.

Only low-or moderate-income elderly persons will be allowed to rent the 123 efficiency and 17 one-bedroom apartments in the project, and their rents will be subsidized by HUD so that they pay no more than 25 per cent of their income. The allowable income levels are revised yearly, but the current cutoff is $9,400 for a single person or $116,000 for a couple.

Many of the speakers at the groundbreaking ceremony emphasized the symbolic significance of the housing project, both for elderly and low-income persons in the city and for the members and friends of St. Mary's Church, a 110-year-old congregation that was founded as the first church in Washington for black Episcopalians.

Berkeley G. Burrell, president of the St. Mary's Court non-profit corporation, pointed out to the half-acre excavation behind the church and said, "I think it is awfully prophetic that all of the messthat you see out here has been made by the first subcontractor, who is black - Raymond Rice, who has done a wonderful job."

Both Bishop Walker and Albert Miller, deputy undersecretary of HUD, called the St. Mary's Court project the beginning of a new housing initiative in the city. Walker said the church planned to sponsor more housing projects in the city, and Miller promised that President Carter's Administration would push similar projects. "In the past few years, I have not attended a lot of groundbreakings. I assure you there will be many more in the future," Miller said.

Mayor Washington was the most effusive speaker on the significance of the St. Mary's Court project, calling it a symbol of progress for human rights in the District.

"Some years ago I used to pick roses off that ground," he said, referring to the old St. Mary's Court project in the 1930's. "I used to have trouble with the police, because I was a young Negro . . . Today I came by police escort . . . If you look back at the time St. Mary's had roses and look at the Right Rev. John Walker (who is black) being bishop today, you would say it's some kind of a miracle - and it is."

It was also a miracle, Washington said, "that you can put 160 odd units for the elderly . . . right in the midst of the most affluent part of the city." He pointed to the apartment and housing site and said, "I thought I would come to see this site turned into another high-rise building for the affluent, at $700 to $1,000 a month rent."

Two advisory neighborhood commissioners from Foggy Bottom later challenged what they considered the mayor's allegation that Foggy Bottom residents were affluent and opposed to the St. Mary's Court project. Ann Loikow, vice chairman of the Foggy Bottom Advisory Neighborhood Commission, said many of her elderly constituents were looking forward to the project and hoping to get into it. The mayor said he meant to imply no community opposition.

The apartment building is expected to be completed and ready for occupancy in about 18 months.