Federal housing officials have told the District it cannot let some Southeast Washington residents screen prospective tenants for a small apartment building in their neighborhood that will be used for public housing.

"It is totally in violation of the tenants' confidentiality," said Jo Fisher Hall of the area office of the U.S. Department of Housing and Urban Development. She said she told city officials of the federal government's position during a lengthy meeting last week.

In an unprecedented move to defuse the opposition of nearby black middle-class homeowners, city housing officials had planned to create a six-member panel to select tenants for a new public housing building at 3810 Southern Ave., three blocks from Mayor Marion Barry's home.

The panel, which was to include three neighborhood residents, two city housing department employes and a public housing resident, would have received personal information about prospective tenants, such as their income and family size. But city officials said their identities would not have been divulged

The three non-resident panel members were to visit applicants' homes, interview them and check for cleanliness and good housekeeping habits, housing officials had said.

Sidney Glee, the city's public housing chief, said he agreed with the HUD ruling and would create a new selection panel with three housing department staff members and two public housing tenants.

Glee, who is to meet tomorrow with the three neighbors who had been selected for the committee, said: "When you think about the release of information, it could be not in the best interest of the potential renters. It's something we have to accept."

Two weeks ago, Glee said that city housing department lawyers had ruled that the plan did not breach confidentiality.

Nadine Thompkins, president of the community association for Fairfax Village, which is next door to the apartment building and is the center of most of the opposition, said she had not been told of the decision and therefore had no comment. But she said, "it's a big change."

Other neighborhood leaders could not be reached for comment.

Glee said that neighborhood residents will be asked to propose and help find funding for social service programs, such as employment and family counseling, which the department wants to establish in the building for tenants.

The screening program was designed largely to overcome the objections of Fairfax Village homeowners, who said they feared that public housing would increase crime and lower property values in their pleasant, quiet neighborhood.

But Hall, who monitors public housing in the metropolitan area for HUD, said citizen involvement in tenant selection was "totally inappropriate."

"All [federal] regulations make tenant selection the sole responsibility of the housing [department]," she said.

A HUD spokeswoman said she knew of no jurisdiction in the country that allowed citizens to help select public housing tenants.

Most of the apartment building's tenants would be single working mothers who earn between $8,450 and $17,400 a year and have one or two children. Twenty per cent of the families must earn what is considered to be a very low income: $10,900 or less for a family of three.

City officials have said they want to make the three-story red brick building the showplace for a new city program of buying small apartment buildings around the city for public housing. Currently, there are nearly 12,000 public housing units in the District, most of which are located either in run-down high-rise buildings or in large, barracks-like buildings scattered across several acres.

Glee said, "I think it [public housing] will still be accepted, but we must show that we are very serious" about maintaining the buildings.