The Alexandria City Council has instructed city officials not to pursue a proposal from Mayor Frank E. Mann that the city government buy for nearly $1 million two aging apartment buildings that Mann and some friends own.

The mayor told the council Tuesday night that the structures, known as the Commonwealth Apartments, could become the first city-owned housing for the elderly financed exclusively by city funds.

Mann said that if the city were to run its own housing program for the elderly, it would eliminate red tape that he said accompanies federal funds to subsidize such housing.

Mann made his proposal verbally to City Manager Douglas Harman on Feb. 16 and has not yet submitted it in writing, Harman said yesterday.

In a memo to the council at its Tuesday night meeting, Harman pointed out that federal funds account for at least 25 percent of the expenses involved in operating housing subisdy programs in the city. He said that if the city were to run its own programs, that money would have to come from its own tax revenues.

He recommended that his staff forgo considerationof Mann's proposal unless specifically directed by the council to investigate it. The council, without discussion, approved Harman's recommendation.

Mann, a political independent who is seeking reelection, purchased a 25 percent interest in the 76-unit apartment complex in 1969 for $150,000, according to city records. The current assessed valuation of the buildings is $938,900, with annual taxes due of $14,459.06, according to the records.

In Monday, one of the apartment units was condemned as unfit for human habitation by the city Health Department because of a leaking roof, according to a city official.

Mann said recently that the leak was caused by the recent heavy snows.

The apartments are on Commonwealth Avenue between Monroe Street and Nelson Avenue on the southern edge of the city's Del Ray section.

Several tenants of the three-story brick complex and yesterday that most of the residents are elderly pensioners who pay about $150 a month for a one-bedroom apartment and about $100 for an efficiency.

Mann argued to the council Tuesday night that a city-run housing program for the elderly would enable local officials to concentrate on helping elderly Alexandrians who have lived in the city for many years. He said that as federal assistance programs are not run, many persons who have not lived in the city for a long period are qualified for housing assistance and that some I longtime tesidents could be excluded as a result.

Immediately following the council's rejection of his idea, Mann, remarking on his concern over bureaucratic red tape, voted against a resolution seeking $173,000 in federal housing subsidy funds. The resolution was approved.

City Attorney Cyril D. Calley said yesterday he had not researched the question of whether the mayor could receive money from the city for the sale of his property. "There are soime restrictions" in Virginia law "about officials dealing with the cities they serve," he said.