A long-awaited and powerful city agency that will lend millions of dollars and virtually control most of the future low- to middle-income housing built in Washington is finally getting under way at a time when high-interest rates have nearly crippled housing development.

The Housing Finance Agency, patterned after similar agencies in most states, last week selected 10 of 33 proposed apartment rehabilitation projects to receive the first of the HFA's low-interest loans.Six of those projects went to tenant groups planning to buy their buildings and convert to cooperatives.

The HFA plans this December to sell an estimated $40 million in tax-free revenue bonds, which carry a below-market interest rate, to finance the projects that will create 1,508 new units. In 1982, the HFA plans to sell $100 million in bonds and then lend the money to families -- again at low-interest rates -- so they can buy their own homes.

"We're like a bank," said Floyd Hyde, an urban consultant who is chairman of the nine-member HFA board of city officials and private citizens.The agency can lend money to banks, developers or tenants to help finance various housing projects.

But because interest rates hovering near 20 percent have brought low- to middle-income housing development to a near standstill, the HFA's millions also will be one of the most important sources of housing funds in Washington. Moreover, its guidelines require that only half of the units it finances be for low- or moderate-income people, meaning that the other half could be sold or rented to people earning as much as $50,000 a year.

The FHA's potential power to help developers and higher income individuals has not been lost on D.C. City Council member Charlene Drew Jarvis, chairman of the council's development, who has kept a close watch on the agency's plans.

"This agency is going to be handling a lot of money and it will not be an agency handling that money out of public review," said Jarvis. "That's why I have been intimately involved, much to their distress.

"My fear is that the agency will finance housing with tax-exempt money for low- and moderate-income families which in later turnovers will not be made available to those families," she said.

The city law creating HFA was signed by Mayor Walter Washington in 1977, but it has taken several years to get through Congress and get organized. The law says that "initially" 20 percent of the HFA units in any one project must be rented to families generally earning less than $28,000 a year, but it is silent about the income of future renters.

Jarvis also said she wants to make certain that the HFA records are open to the public. She said her concern about public access to the housing finance agency springs from her recent investigations into the activities of the D.C. Development Corp., a quasi-public agency, created seven years ago to generate low- and moderate-income housing and make loans to minority businessmen.

That agency has come under fire recently from Jarvis and city housing director Robert L. Moore for alleged failure to make mortgage payments on some of its properties and its high number of delinquent loans, but it still has refused to make public some of its records. Hyde said that issue would not arise in the case of HFA.

"We're a public body," Hyde said. "We hold open meetings and we are covered by the city's sunshine law," which prohibits city officials from making policy decisions behind closed doors. HFA minutes of board meetings, its annual report and its financial records are all open to public inspection, he said.

If a board member or member of the 25-person advisory group of the board has a financial interest in one of the projects under consideration for funding, that interest must be publicly disclosed, he said.

There is little doubt that HFA will have considerable influence. It is the only city agency with the power to: sell tax-exempt bonds without prior congessional approval; make low-interest loans to developers and tenant groups; buy mortgages from banks and savings and loans; make low-interest loans to banks and savings and loans that these financial institutions then lend to families who meet agency guidelines; own, lease, clear, reconstruct, rehabilitate, repair, manage, operate and sell real estate. c

About 30 percent -- or about 550 -- of the apartment units approved by the HFA last week are subsidized by the federal government, which had originally allocated the finance agency 384 subsidized units this year. Last week it announced that the organization would get the additional units.

Last year, Congress became alarmed by charges of financial abuse by other HFA's around the country and restricted the financial operations of these agencies.

Among other things, the new law has tried to cut off one of the most lucrative sources of extra money for the housing agencies -- the interest earned on money invested after the bond sale. The new law prohibits the HFAs from earning more than 1 percent above the interest rate charged on their bonds, which is supposed to encourage the agencies to make loans with their funds rather than invest them.

But the new federal legislation also has temporarily stopped HFAs from meeting one of Washington's most serious housing needs -- making mortgage loans to low- and moderate-income tenant groups who want to buy their apartment buildings and convert to cooperatives. Such groups were the bulk of the 33 applicants.

To get around that problem, the agency recommended to such groups that they change their status from cooperatives to corporations. They would then own and operate their buildings as rental properties, making them the first tenant-landlords in the city.

The 10 projects selected include: Carmel Plaza, 200 K St. NW; Benning Heights, Alabama Avenue and E Street SE; Garfield Hills, a nearly vacant apartment complex on Irving Street SE; Franklin Commons, to be built at First and Franklin streets NE, after much community opposition; Harvard Hall Cooperative, 1650 Harvard St. NW; the 1372 Kenyon St. Tenants Cooperative; Potomac View, at 4688 Martin Luther King Ave. SE, partially vacant; Thompson Plaza, 12th and U streets NW, on the former Thompson's Dairy site; the 1312 Euclid Tenants Cooperative; and the East Capitol Cooperative, 4270-76 East Capitol St.