District residents planning to use the city's low-interest loan program to renovate their homes more for elegance than for shelter will find themselves out in the cold in the future says D.C. housing director Robert L. Moore.

Moore said yesterday the District government is making major changes in the problem-plagued program which had been used by some relatively affluent families to add green-houses and skylights to houses under-going restoration.

In the future, Moore said, the low-interest, long-term loans will be ear-marked for lower-income families and the elderly seeking money to repair basic things like sagging porches and leaking pipes.

"We found that people had been a little bit luxurious with the loan funds," said Moore. "There'll be no more of that."

The loan program has been frozen while the city tries to deal with about 400 backlogged applicants, Moore said. The new guidelines will become effective Aug.1, he said, at which time the moratorium on new applications will be lifted.

The new regulations will permit very low-income families-a family of four earning up to $11,250 a year-and the elderly and the handicapped to get 20-year loans at only 1 percent interest and in some cases grants to fix up their homes.

Moderate-income families-defined as a family of four earning up to $28,125 a year-can qualify for 6 percent loans still well below market rate.In addition, loans under a popular and controversial federal program called "Section 312", and other loans provided at only 3 percent interest, will be targeted to those earning no more than $21,400 for a family of four.

Families who get low-interest loans by agreeing to rent apartments to lower-income families will be required to do so for 20 years, rather than 5 years as at present.

"It's a whole new start for this administration," Moore said of the changes.

Moore said that in the past, the programs have benefited those with more education and higher incomes, who could deal better with the bureaucracy in getting their loans approved.

"We're now going to tilt the programs toward low- and moderate-income families," he said.

The loan programs operate only in specially designated community development, or urban renewal, areas, which include the Shaw and 14th Street areas in Northwest as well as several Northeast and Southeast communities.

Additional changes will be made to improve the operation of the programs. Some of the work now done by housing department staff will be contracted out to private firms to speed up the processing time, Moore said. Applicants have complained for years about delays in getting their homes renovated.