The U.S. Department of Housing and Urban Development, which filed for foreclosure on the Clifton Terrace apartment complex two months ago, yesterday became the owner of the project by being the only bidder at a foreclosure auction.

HUD officials from the Washington area office said they also signed a contract yesterday with a firm that immediately will begin to take over management of the rundown complex.

HUD officials said they plan soon to begin fixing up the project and correcting the hundreds of fire and housing code violations that were found in Clifton Terrace's three buildings at 14th and Clifton streets NW.

Terry Chisholm, Washington area manager for HUD, bid $1,107,900 for the 285-unit complex, the home of about 200 low-and moderate-income tenants.

When HUD began foreclosure action two months ago, it asserted that P.I. Properties, the Pride Inc. affiliate that had owned the complex for three years and managed it for four, was guilty of mismanagement and owed more than $300,000 in mortgage payments and other unpaid bills. Chisholm said the $1.1 million figure represented the value of the property, taking into consideration the unpaid bills.

"Welcome back," the 15-year tenant George Blackwell told Chisholm after the sale. Blackwell, who has complained frequently in recent years about the management of the complex, told a reporter, "I've been waiting four years for this."

Larry Dale, director of housing for the area HUD office, said HUD is committed to keeping Clifton Terrace as an apartment building for those with low and moderate incomes, even if the building is sold to a private firm, as HUD eventually plans to do.

The management contract is with Jones, Wells and Associates a firm that has managed other low-income projects, Dale said. The contract is for six months, at $5,000 a month. Dale said security guards would remain at the complex, "at least for the time being."

Only five years ago, HUD had to foreclose on the complex's former owner. Dale was asked whether the project ever could be operated effectively, in light of its past failures.

"Certainly there is a lot of work that has to be done," Dale said. "We'll work with the tenants to make it a good place to live." He added that it would take a "significant amount" of money to fix it up.

P.I. Properties and its president, Mary Treadwell, had sought unsuccessfully to postpone the foreclosure auction. Treadwell has contended that Clifton Terrace's problems stem from HUD's lack of financial support for operation of the complex.