Patricia Roberts Harris, secretary of Housing and Urban Development, yesterday announced her decision to renovate and restore the boarded up Baber Village low income apartment project in Prince George's County.

Her decision goes sharply against the wishes of County Executive Winfield M. Kelly, who wants the dilapidated complex demolished in part as a symbol of his opposition to subsidized apartments for the poor. Kelley is currently seeking a court order to raze the project as a health hazard.

"That place has been boarded up for two years," said John Lally, an aide to Kelly. "HUD's proposal is to recreate Baber Village. What will happen is what happened in the past, it was closed two years ago, and it was built less than 10 years ago. Our position is that it is a health hazard and an ill-conceived idea." Lally added that some citizens associations near Baber Village also oppose its rehabilitation.

Since last October, however, there has been a ban on demolition of HUD-backed projects without the HUD secretary's approval, and the secretary has decided that Baber Village can and should be saved.

"Demolition of this or any other federally assisted housing project is a last resort, a total waste, not only of taxpayers' money but of potentially decent housing as well," Harris said in a press release. "We do not consider demolition a viable policy option; we consider demolition a failure of policy."

Baber Village, located next to a middle-income community at Central Avenue and Cindy Lane, in Seat Pleasant, was one of the first privately financed housing projects in the nation in which most of the low-income tenants received federal supplements to pay more than half their rents. When Robert C. Weaver, former HUD secretary, broke ground for the project in 1968, it was praised as a model of public-private cooperation.

Baber Village was a complex of three-story garden apartments designed to avoid the barreness of high-rise housing projects, like the infamous Pruitt-Igoe in St. Louis. The village was sponsored by the African Methodist Episcopal Church.

But within two years, some of the apartment units had been condemned and the County Council had adopted a resolution noting that the project was in a "serious state of physical and sociological deteriotation."

At the same time, Prince George's County was increasingly becoming magnet for people seeking low-priced housing and apartments they could no longer find in the more affluent suburban counties surrounding the District.

Kelly has waged an aggressive campaign to reverse that trend an attract middle-class and upper-middle-class homeowners, "junior executive" types, as Kelly describes them.

The Prince George's Housing Authority proposed last fall to HUD that Baber Village be razed and replaced with new dwellings. But a HUD inspection team concluded that it would be "far less costly" to rehabilitate the complex new buidlings or houses, according to the press release. A HUD spokesman did not have comparative figures available yesterday.

Charles Ross, deputy director of the housing authority, said he met with area HUD officials yesterday to get details about the planned renovation. Rose said that 130 of Baber Village's units will be renovated as apartments, and the remaining 30 or so units may be used for such things as housing authority offices or space for a day-care center. He said the housing authority will present HUD's plans to the county executive soon, and said he hopes that something will be worked out.

"Nobody really wants a clash in court," Ross said.

The county housing authority purchased Baber Village from HUD in June 1975, with the condition that some of the money was to be used to rehabiliate the units. But none of the money has been used to fix up the project, HUD said.

Ross, said about $1.1 million of the money, that HUD provided was used to pay off the mortgage on Baber Village. Another large amount was used to pay relocation expense of the families who had lived there, he said. The housing authority still has about $400,000 Ross said, and part of that probably will be used to do such things as hire security guards.

HUD has instructed the housing authority to provide 24-hour security patrols at Baber Village, work up a rehabilitation plan for fewer but larger bedrooms, and to cooperate with neighbors and local officials. HUD, in turn, will commit funds for the improvement, will improve the landscaping and correct drainage problems, and may build a playgroud for neighborhood children there, according to the press release.

Most of Baber Village was demolished in the summer of 1976. At that time, Kelly called a press conference to commemorate the demolition in the name of his "New Quality" movement.

"Kelly is adamantly against the recreation of Baber Village," Lally said. "You can't expect people to live and develop and move up if they're all packed into a ghetto project." Lally said the county executive opposes programs that subsidize landlords instead of families.

"With Baber, subsidies were granted to the builder and the developer. They got the cream off the top and jammed poor families in there, re-creating ghettos," Lally said."We favor a certificate program that gives needy families themselves a subsidy, and they are not branded as coming from a welfare project."