The state has awarded a $25,000 grant to help Loudoun County and four small Northern Virginia towns apply for federal-state grants they were denied last year because they could not show they were sufficiently needy.

In December, Virginia will distribute $16 million in federal Community Development Block Grant funds for community projects that assist low and moderate income residents and that must meet a dozen other criteria. While large urban areas receive set amounts of funds as "entitlements," the state's 303 towns, small cities and rural communities must compete for a share of block grant funds.

Last year, eight Northern Virginia localities applied to share in $14.1 million in block grants but all were denied, apparently because there was insufficient information to show the areas were needy.

The 1980 census found Northern Virginia as a whole to be one of the wealthiest regions in the nation, but many small rural areas and towns are relatively poor, with large numbers of elderly residents living on fixed incomes.

Winning this $25,000 federal-state grant at least "will give us a better shot at winning federal funds" for other grants, according to Thomas Brannan, spokesman for the Northern Virginia Planning district Commission, which will help the towns prepare future grants.

Last year Purcellville and Round Hill unsuccessfully applied for funds for water projects, Lovettsville for a sewer project and Quantico and Loudoun County for housing rehabilitation projects.