The boilers at the James Apartments, 1425 N St. NW, had been acting up for several winters. They needed retubing. Last winter, they got it. The $3,520 to do the job came from Community Development Block Grants.

About a mile north, in the 1300 block of Fairmont Street NW, the sidewalks were 50 years old, and they looked it. Block grants supplied more than $100,000 to replace them.

Last summer, in 17 neighborhoods around the city, crews of teen-agers did landscaping and beautification work. Their supplies were provided by $20,000 worth of block grants.

Now in their fourth year, Community Development Block Grants CDBGs) represent one of the largest single doses of federal grant money injected into the District of Columbia.

During the fiscal year that began Oct. 1, the City is authorized to receive $32,575,000 in block grants from the U.S. Department of Housing and Urban Development (HUD). The Washington area as a whole will receive more than $52 million.

But the District has not yet received any of its CDBG authorization for the current fiscal year. HUD is withholding the money until the city submits a plan, which HUD must approve, to relocate 300 families displaced by a block grant rehabilitation program.

City officials have said the relocation plan will be submitted "by January." They say the city's 150-odd CDBG programs are operating on unspent funds left over from last year, and they do not expect to lose any of their authorizaiton for this year.

The city CDBGallocation was briefly withheld two years ago. A HUD audit revealed that more than 20 percent of the city grant in the previous year had been spent on administration. Twenty percent is the legal limit.

Since then, the city has been under orders from HUD to reduce its CDBG administrative staff by 5 percent each year or face another holdback of funds. So far, via attrition, the city has complied.

But further trouble may be lurking.

The HUD washington area director, Terry Chisholm, notified the city in October that it might not be following HUD regulations in seven other kinds of CDBG projects-public housing modernization, rehabilitation of urban renewal properties, site improvements, rehabilitation GRANTS, From Page 1 financing, assistance to minority contractors, public services and planning. City officials have said they are moving to correct deficiencies in these areas. A HUD decision is expected next month.

Meanwhile, during the recent mayoral campaign, Marion Barry vigorously urged the firing of city housing director Lorenzo W. Jacobs Jr., partly because Jacobs was implicated in the CDBG difficulties. Barry some what softened his stand after he was elected, but Jacobs' job, and those of some of his ranking aides, are still said to be in danger.

The block grants that are causing all this turmoil are nothing more or less than old housing and community development funds wrapped in a new, neater, single package.

During the Johnson and Nixon administrations community development funds were appropriated separately-under Model Cities, revenue sharing, urban renewal, soil erosion, historic preservation and other programs. The Ford administration decided to consolidate these into one "block". The idea was that block grants would be easier to administer, tailor and control, for both federal and local officials.

Block grants are allocated by formula. The size of the District grant is determined by population, lags in economic growth and age of housing stock.

The City Council decides where CDBG money will be spent. This year, it has desig-nated 17 target areas, all east of Rock Creek Park. The Residents of all 17 target areas have average annual incomes of less than $10,346, which is 80 percent of the District average for a family of four.

Even though Washington has been granted $158.7 million in CDBG funds over the last four years, most of that money's effect is not visible. Fewer than 10 percent of the projects begun in the city in the first CDBG funding year have been finished.

Officials say delays-many of which they call unavoidable-are the reason.

"We're strangling in things that we need to do before we can move," said Roy Priest, the District CDBG coordinator. "We're not as flexible as we thought we'd be.

"Hell, an environmental impact statement takes six weeks. Then you have to post a notice of intent to issue a finding. That's 15days. Then you issue the finding. Fifteen more days. A notice of intent to release funds. Fifteen more days. You get the idea.

"In the very first instance, before you've been started, you've breached the trust between you and the citizens."

Partly as a result of such delays, the cityhad great grouble spending its CDBG money in the first two years of the program.

"We were on of the worst cities in the country at it," Priest said. "We didn't move as fast as maybe we could have."

In any case, Priest said, "We have always annually committed at least 70 percent of our funds." He and HUD officials noted, too, that CDBG money is not "use-it-or-lose-it." Any money that is earmarked but unspent is simply carried over to the next fiscal year.

Assuming HUD and the city make peace, the city plans to spend nearly $14 million of this year's $32 million allocation to acquire property, improve streets and sidewalks, enforce the housing code and issue rehabilitation loans and grants.

The city has budgeted another $8.9 million for administration. That works out to more than 25 percent of the total city grant, 5 percent more than the legal limit of 20 percent and nearly twice the national average.

But since 25 percent is a 15 percent improvement over the former figure of 40 percent, and since the percentage budgeted for administration has shrunk for two years as HUD insisted, HUD approved the $8.9 million figure.

Another major sticking point in this year's CBDG budget is $5.1 million in back interest the city owes on old urban renewal bonds.

The city has asked HUD to discontinue its policy of wiithholding money from CDBGs to cover such debts. It has said it watns to repay the money from other funds. The city submitted an alternate repayment plan to HUD last fall. HUD is still studying it.

Far more than most jurisdictions delays in implementing CDBG programs cost the District big money. The reason is that, because of urban renewal programs begun during the '60s but never finished, the city owns more than 20,000 housing units.

More than $700,000 in CDBG funds are budgeted during the current fiscal year to pay real estate taxes on some of that housing. Plans call for the units to be rehabilitated and sold. But until they are, the city owes the taxes.

Similarly, the city has decided to pay 735,000 worth of operating and administrative expenses out of CDBG funds. The money will go to maintain housing the city will eventually rehabilitate and sell-but hasn't yet.

The District will face greater pressure to make its CDBG dollars "count" in the years just ahead.

When CDBG's were first instituted in 1974, many communities had been receiving more in urban renewal funnds than they were entitled to get in CDBGs. The District was one of these. It and others like it were allowed to drift down to their CDBG formula levels over a number of years.

But the drift was designed to accelerate after a few years, and acceleration time is almost here. From this year's level of $32.6 million, the city will slip to $20.9 millio two fiscal years from now.

HUD official shave warned the city that, in the next fiscal year, no more than 20 percent of its total grant can go for administration. But as the city grant drops sharply, its personnel attrition must drop even more sharply to get below the 20 percent ceiling.

"They may have problems," and James L. Fletcher, director of community planning and development in the Washington are HUD office.

Another problem may be the focus of the city program.

During the first three years of CDBGs, the city emphasized rehabilitation of the city stock of public housing.

Starting this fiscal year, the city is emphasizing rehabilitation of privately owned housing through loans and grants. It is also trying to induce private commercial developers to build apartments and stores near the homes that have been rehabiliated.

"The problem was that concentrating on public housing, you'd never get there," said Priest. "There are 12,000 city-owned units of public housing in this town. It would cost $80 million just to get them all up to code, not to mention the deferred maintenance and the work the heating plants need.

"All the money we spent in public housing was well spent. But we have to do more things with the money."

No HUD official would agree to be quoted by name when asked to discuss the District CDBG program. Several said it was run more poorly than any other in the Washington area. But several others said that somewhat understandable. All the officals interviewed said that, administratively, the program is in far better shape than it was three years ago.

"We're rolling," agreed Priest. "The problems are big, but this money is helping us attack them." CAPTION: Illustration, no caption, By William T. Coulter for The Washington Post; Picture, The Urban Homesteading Program, funded with Community Development Block Grants, helped Ola Davs buy a home for $1 and get a $20,000 rehabilitation loan. By Craig Herndon-The Washington Post