District of Columbia Mayor Marion Barry has been asked to approve major changes in the city's low-interest rehabilitation loan programs - changes designed to end loans to affluent homeowners renovating more for elegance than shelter.

Robert L. Moore, the city's director of housing and community development since January, says he has proposed a massive program restructuring so that families earning less than $18,000 a year, who need to fix a leaky roof or a sagging porch, will get first chance at the city's limited loan funds.

The new proposed income limit means some families who expected loan settlements this spring may find the city taking a second, hard look at their applications.

"We want to ensure that those with the lowest incomes will benefit," said Moore. "The current program benefits the most educated and the most sophisticated people with higher incomes."

Moore cited instances of $50,000-a-year homeowners who received rehabilitation loans and of other affluent families using the 3 per cent interest loans to add home greenhouses and skylights.

A Washington Post article last December disclosed that tens of thousands of dollars of low-interest money was flowing to affluent families at a time when some private lending institutions were charging more than 11 per cent interest.

Moore said the city plans to reduce red tape so loans can be processed faster and made more accessible to the poorly educated. Some staff changes already have been made, he noted, and others are planned.

Moore said he has discussed the proposed policy changes with Mayor Barry and expects a response soon.Details of the changes were sent to the mayor in writing this week, he said.

The city has two rehabilitation loan programs that will be affected. One is a popular controversial federal program known as "Section 312" that provides loans of up to $27,000 per unit at 3 percent interest. There are no income limits.

The second is a city program that offers low-interest loans funded out of the annual allocation from the community development block grant program.

Both provide funds for families living only in specially designated urban renewal neighborhoods, which includes such sections of the city as Shaw, the 14th Street area, and several Northeast and Southeast communities.

The city has several million dollars available this year for the two loan programs. Housing officials said higher income families sometimes got large sums of money through the Section 312 program in the past because the Department of Housing and Urban Development formerly made money available for the program sporadically, with little advance notice.

Persons with high incomes who could move quickly to hire architects were often first to be served, while lower-income families were kept waiting officials said.

This year HUD began to set aside an annual allocation for each city in the nation, so that each will know in advance how much money it will get for the entire year. D.C. housing officials, in addition, plan to seek out eligible low-and moderate-income families who often don't know the programs exist.

One low-income Shaw resident-who asked not to be named-said she needed new floors, new walls, new windows and new doors in her duplex and applied for a low-interest loan last spring.

Whenever she or members of her family try to find out if their loan is being granted, she said, "They tell us something about computer problems."

Iona Berryman and her twin sister, Iola Mitchell, applied for a low-interest loan from the city to fix up the R Street home that has been in their family nearly 30 years. That was more than two years ago. They still are waiting for the money.

Mrs. Mitchell, who is retired, and her husband live in the house now. They have an income of a little more than $13,000 a year. A loan, they said, would help repair the ceilings, walls, roof and a back porch in "terrible condition." Mrs. berryman said, "It scares me to go out there."

Their efforts to get a loan, they said, have been met with "the runaround."

The proposed changes, however, have dismayed a number of families who have worked for months-in some cases more than a year-to get renovation money from the city.

They complain that the city is changing the rules in the middle of the game for them, and punishing many middle-income families for the past abuses of a few.

Moore said about 400 people are now in some stage of the loan process and said the restructing will not necessarily eliminate all higher-income people.

But he added some will find themselves waiting longer than anticipated, some will be asked to accept loans at interest rates up to 9 percent, and others will be asked to eliminate "frills" in their renovation. Some may not receive the full amount of funding requested, he added.

Betty Pair, a sales associate for a real estate firm in the Logan Circle area, said the proposed program changes may spell the "destruction" of her dream of buying a home in a racially and economically mixed neighborhood.

Pair, 36, and her husband Quentin, an attorney, bought 1327 T St. NW last June for $40,000, expecting the low-interest loan from the city to help fix up the shell. They have a teenaged daughter, and expect Mrs. Pair's mother to live with them when she retires. Pair said their income last year was about $21,500.

"They're turning away moderate-to-middle income people," said Pair. "You must give aid to Middle America. Otherwise only the very poor and the very rich will live in the city . . . I don't want to sell our home. I like our street. We want to be part of the revitalization of the city."

The Pairs currently rent a home at 7th and Girard Streets NW from her husband's relatives.

Carolyn and John Smith bought their shell at 9th and M Streets NW last year for $50,000. They had been forced out of their former Q Street home, they said, when the building was sold and the new landlord raised their rent from $375 a month to $600 a month.

The Smiths' attempts to get a conventional loan for their M Street home were in vain, they said.

"They just sort of laughed at us," said Carolyn Smith. One loan officer, she said, told them, "We don't loan money for houses in areas like that. You must be crazy."

Their income would have enabled them to get a city loan, even under the new, proposed rules, the Smiths said, but recently they began earning more. Mrs. Smith, who does research on the nervous system for the National Institutes of Health, and her husband, a college chemistry teacher, earn about $30,000 a year, they said. They have a five-month-old daughter, and are renting a house on S Street while they wait for work to begin on their M Street property.

But in light of the proposed income policy changes, they aren't certain if they will get their loan.

"If we sell," said Mr. Smith, "they're forcing us to be speculators."

Both the Pairs and the Smiths said they planned to rent out an apartment in their homes to lower-income families receiving federal rent subsidies.