A $5-million rehabilitation project for Greenbelt Homes Inc., one of the oldest cooperatives in the region, is being hotly protested by homeowners who insist the money is going only for cosmetic improvements.

The rehabilitation project is a two-phase program designed to bring the 40-year-old wooden, cinder block and brick homes "up to date," according to Ken Kopstein, project manager for Greenbelt Homes (GHI). It will be partly subsidized by already-secured federal assurances of rent subsidies for 328 of the 1,600 units and community block grant funds for smaller projects such as curbs and sidewalk repair.

Kopstein said the cooperative will correct code violations and structural differences and install energy conservation devices such as storm windows, insulation and siding in most of the houses. The second phase, which is optional for GHI members, would include putting in new bathrooms, kitchens and similar improvements, Kopstein said. GHI would do all the work.

What is not included in the rehabilitation project, and what has upset a number of GHI members, is the structural repair of attic and crawl spaces necessary for proper ventilation of the houses, areas where "nothing has been done for the last 30 years," members said.

"This is just an example of the way GHI management has worked over the years," said Bettie Denson, a Greenbelt resident since 1943 when she moved with her family to the area. "Water has been gathering down there all these years and the structure of these frame houses are being undermined. They have known about those problems and have done nothing until now. I say to GHI, do work that is absolutely necessary to preserve our homes first, then go after the windows and siding."

Kopstein said the problems with inadequately ventilated crawl spaces are not included in the rehabilitation program because they are part of regular maintenance. He said residents raising this issue are "just a small group of people who are ardent opponents of the rehabilitation program. They are just trying to use this issue to get it stopped."

Denson insists she and several others who are bringing the subject to the attention of other GHI members "are not obstructionists."

"I want to feel I can trust GHI.

If they had taken one or two of these places at a time and kept them up, all right. But no, they put a bandaid on whatever should have been done. Once they get the money, they can go ahead and do anything," Denson said. "They should be bonded in some way so we have some control."

Carl Conrad, a retired construction superintendent and former Prince George's County building inspector, calls the rehabilitation project "a sham."

"I have gone down (to crawl spaces) as part of a committee on engineering and maintenance and I have seen the kind of work they do. There is extreme dampness, lack of vapor barriers and uninsulated return hot water pipes. There are gaps at the ends of insulation and debris all over - installed by GHI. This all leads to the rotting and warping of the floors and to the peeling paint on the asbestos shingles on the walls of our houses.

"You know, every year they raise the maintenance fee (which everyone in Greenbelt must pay) by 9.9 percent or 9.7 percent. They can do that as long as it stays below 10 percent. When it hits 10 percent, they've got to come to the membership. This way they never have to do that. They're pretty slick about things like this."

Greenbelt was built in the 1930s as one of the first planned communities in the nation, circling belts of "green" around high-density housing. In the early years, defense workers and their families lived in small courts designed to minimize the need for automobiles, and residents focused their attention on numerous community activities. In the late 1940s, residents formed a corporation to purchase the community from the federal government for $6 million.

Today, two-bedroom attached homes sell for $15,000 and the community is supported by monthly charges for heat, water, trash and maintenance applied to all hometowners. Part of the complaint residents now make is that these monthly charges will be increased when the rehabilitation project begins.

"Forty-seven percent of our residents have incomes under the federal guidelines," making them eligible for rent subsidies, Kopstein said. "We know some might be severely impacted by rehabilitation. That is why we sought federal subsidies and block grant funds. We are trying to preserve the character of the neighborhood. We know there are people here who are barely making enough to make ends meet."

Kopstein's comments are in sharp contrast to the description of Greenbelt by earlier GHI members. In 1967, Charles Schwan, past president of GHI, said "it would not be feasible" even to build moderate housing in his town. He said his cooperative demands high down payments to assure "compatible" neighbors.

GHI still has concerns about the compatibility of its renters and homeowners. The cooperative will not permit any two or more persons who are unrelated to buy or live in a GHI home. Because of this restriction, GHI has been brought before the Prince George's County Human Relations Commission and charged with discrimination.

"That's just what our rules say," said Royal Breashears. GHI general manager. "They can read the contract and if they can't abide by it, they don't belong here. Greenbelt is for families."

When asked why there were only five black families living in Greenbelt, Breashears said. "The down payment is heavy. It is difficult for those blacks to come up with it. We have Koreans, Chinese, Indians and a large contingent of singles. This is a very liberal community, very public minded.Cash outlay was the problem. Every black who has applied to us has been approved by us."

The strictures against singles living together are so great that one woman who was married but legally kept her maiden name for her career was told by the board to get it changed. "They don't like it, they were really touchy about it," said Delores Sunday, a new Greenbelt resident. "So I did. I mean, where else are you going to find a two-bedroom house for $15,000? And, besides, this is a very pleasant place to live."

Kopstein said the rehabilitation efforts of GHI will make it even better. But a county staff member who reviews applications for federal grant money isn't sure.

"I'm not convinced that this level of work can really be considered rehabilitation," said John Griffin of the county council staff. "They have given no thoughts to the relocation of these people, of reducing densities out there. They could take a three-unit complex and make it into one large unit. It would make Greenbelt better in the long run.

"Close to one-third of the housing is going to be locked into low-income housing for 40 years through those subsidies. What is that going to do to the community then?"

The whole rehabilitation package is being debated by GHI members at a series of meetings this week. A vote on the project will then be held. Conrad and Denson are prepared to show documents and pictures to any GHI member who is interested in order to change the phase one project to include more basic repairs.

GHI officials are optimistic the plan will succeed.

"This is the best housing buy in the Washington area," Kopstein said. "Maybe once in a while we slip up, but normally we do pay attention to problems and be as effective as we can."

"If the rehabilitation program is approved. I see a bright future for GHI," Breashears said.