The District of Columbia will spend $550,000 inherited from unclaimed estates to improve group housing for low-income and elderly persons, Mayor Marion Barry announced yesterday.

The outlay will be the first spending from the city's escheated property fund. Escheated property is both cash and real estate that was transferred to the city after their owners died without wills or heirs.

A 1970 court ruling required that the money be kept separately from the city's general accounts and used to benefit the poor. The fund now totals more than $700,000, Barry said.

Under the mayor's decision, $300,000 will be put into a revolving loan fund from which no-interest loans will be made for one or two years to group care facilities serving low-income people. The loans would be used to meet fire safety standards or adapt structures to the needs of the handicapped.

The remaining $250,000 outlay will be used to convert the National Lutheran Home into a new city-operated nursing care facility. Barry recently announced the city's acquisition of the home at 18th and Douglas streets NE. The money will be repaid from the facility's operating income.

Barry said he will decide soon how the remaining money in the fund will be used.