D.C. housing director Madeline Petty told a City Council committee yesterday that her department no longer is in jeopardy of losing $8.8 million of unspent federal funds and that all but $835,000 of the money has been obligated to specific public housing improvement projects.

Based on October status reports from the District, the U.S. Department of Housing and Urban Development warned last month that the city had until the end of the year to spend the full $8.8 million or lose it.

City officials initially had sought a deadline extension for obligating $6.4 million of the total amount. But yesterday Petty told the council's Committee on Housing and Urban Development that her agency had made substantial progress in an all-out effort to commit the HUD funds.

She said HUD has been informed that $4.9 million has been obligated for improvements to the Lincoln Heights, Richardson and Kenilworth housing projects in Northeast Washington, and that all but $835,000 of the remaining funds has been obligated or spent. Petty said she was confident that none of the funds would have to be returned to HUD.

Council members Charlene Drew Jarvis (D-Ward 4) and Nadine P. Winter (D-Ward 6) were the only members to attend the committee hearing. Jarvis, the chairman, said the committee plans to review future city applications for HUD funds. Winter told Petty that she was concerned about a large number of complaints she has received about serious maintenance problems in public housing.

"I'm a little sick and tired of rolling out of bed at 2 in the morning because people don't have heat or hot water," Winter told Petty. ". . . What does it take to make people warm, safe and healthy? We can only get this from you."

Of the 11,763 public housing units managed by the D.C. Department of Housing and Community Development, 1,900 units are vacant. About 13,000 people are on a waiting list to obtain public housing.

In a lengthy written statement, Petty told the committee that the housing department has been faced with staffing problems and inadequate resources. She said it would cost about $15 million to make all of the vacant public housing units habitable and an additional $525 million to house those on the waiting list.

Petty said she has made public housing a priority and that she confers almost daily with Mayor Marion Barry about problems ranging from delays in renovation to difficulties in collecting rents.

In explaining why the HUD funds had been in jeopardy, Petty said her department lacked adequate staff to carry out the program. The office that manages the District's public housing currently is without a permanent director.

Because of the complex procedures involved in using HUD modernization funds, Petty said, the process takes an average of 2 1/2 years. She also said that HUD is reviewing its allocation of funds.

"I think we should recognize that HUD has been making a consistent effort over the last few years to severely cut back the public housing program, including the recapture of previously approved funds," Petty said.

I. Margaret White, manager of HUD's District field office, told a reporter yesterday that the D.C. Housing Department had "moved very aggressively" to use the unspent funds and that HUD will decide whether any funds should be withdrawn based on HUD's December review.

White said the District funds had been granted in connection with the Comprehensive Improvement Assistance Program and designated for improvements at specific projects, including Arthur Capper, Fort Dupont Dwellings and James Creek.

"We really don't want to take the funds back," White said. "By the same token, those funds were to improve public housing . . . . The longer the money stays out, the less it will purchase."

A total of 3,347 housing units in 10 projects were targeted for remodeling under the city's current modernization program, according to Petty. Of that total, 1,389 units have been completed, 1,072 units are under construction and 886 units are under architectural design, she said.