The District of Columbia will lose $6.4 million in community development funds next fiscal year, Housing and Community Development director Robert L. Moore said last week. Moore spoke to about 150 D.C. residents at a public hearing on the city's draft application for block grant funds.

The cutback is due to a revised formula enacted by Congress, Moore told the residents, many of whom had come to make a final plea to have their projects included in the application.

The hearing was the final step before the application is submitted to the City Council for approval. The application, which outlines how the city will spend $26.2 million in block grant funds, will then be sent to the U.S. Department of Housing and Urban Development.

Hearings on the application have already been held in each of the eight city wards.

At the hearing last week, the Rev. Gerald L. Martin, of the LeDroit Park Housing and Development Assistance Corporation, asked Moore to add his neighborhood to the list of neighborhood strategy areas, low- and moderate-income areas that will receive the bulk of community block grant funds.

"Ninety-two percent of the residents (in LeDroit Park) are below the $15,000 income level," said Martin. "Something extra should be done to provide housing. There's an active real estate market, with restored houses selling for $50,000 or more. Seventy-five percent of the housing is owned by absentee landlords. There are 70 vacant housing units in the area and half of them are owned by Howard University. Howard also owns a lot of vacant lots, and there's no pressure to revitalize them."

Moore said the department would consider making LeDroit Park A neighborhood strategy area and would also "see to it that Howard and others bring vacant housing back to the market."

Under the proposed application, some of the major allocations include:

$5.9 million for rehabilitation loans to -- low- and -- moderate-income homeowners.

$1.2 million for the city to purchase vacant housing.

$2.2 million for improvements to city streets.

$47,000 for aid to property owners with soil erosion problems.

$4 million for upgrading public housing.

$744,000 for "weatherization" assistance for elderly, low-income or handicapped homeowners to make improvements to their homes to reduce fuel consumption.

$4 million for interest-free loans to help low-income families become homeowners.

$6 million to help tenants and tenants' associations buy their apartments or buildings when the buildings are converted to cooperatives or condominiums.

Many of the speakers who testified at the hearing complained that the funds allocated were insufficient or objected to the types of projects planned for their neighborhoods. James Maza, of the D.C. Association for Retarded Citizens, for instance, complained that hte application included housing for only 1,500 handicapped citizens.

"I doubt that, in view of the order to deinstitutionalize Forest Haven, there is enough money set aside for housing the mentally retarded," said Maza.

Frank Hill, of Advisory Neighborhood Commission 7A in Northeast, objected to the low-income housing proposed for the area, including a project planned for the 25-acre Parkside site on Kenilworth Avenue NE.

"We have 12 public housing developments in the area already," said Hill. "The community cannot afford any additional low-income housing."

Instead, Hill suggested that the Parkside site be developed with town-houses to be sold to moderate-income families and that it include a commercial complex with shops and medical and day-care facilities.

Moore agreed to meet with the ANC on the Parkside project, but said 15 percent of the development should be set aside for low-income families.

Linda Fisher, of the Deanwood Citizens Association, praised the application, saying it meant that "Deanwood is no longer being ignored-the city is finally going to attack its needs and problems."

One of the most serious problems, said Fisher, is soil erosion.

"The loss of land is aided by the city's failure to shore up the area with permanent streets and sidewalks," said Fisher, urging that the schedule of street repaving in Deanwood be moved up.

Dick Jones, of the 1jth Street Project Area Committee, complained that the city was moving too slowly to solve problems and urged city officials to coordinate housing construction in the 14th Street area.

"Three presidents have told us that 14th Street will be rebuilt," said Jones. "Our problem is whether it will be in our lifetime, in our kids' lifetimes or in our grandkids' lifetimes.

"We have new construction next to some of the worst slums. We're losing families because who wants to live next to that?"

Moore told the group that the neighborhoods scheduled to receive the bulk of the block grant funds include: 14th Street, Shaw, Downtown, Northwest 1 (bounded by New York Avenue, M Street, North Capitol Street and 3rd Street), Northeast 1 (bounded by N Street, G Street, the B&O Railroad Tracks and North Capitol Street), the Bloomingdale-Eckington-Edgewood neighborhood, Southwest, Near Southeast, H Street-Stanton Park, Fort Lincoln, the Deanwood-Kenilworth-Burrville neighborhood, Parkside, Marshall Heights, the Fairlawn section of Anacostia, the Uniontown section of Anacostia and Washington Highlands.