The District government is free to spend money on improvements to a shelter for the homeless owned by the federal government, according to officials of the General Services Administration, which holds title to the building.

The decision reverses an earlier policy of the U.S. Department of Health and Human Services, whose then-chief of staff said the District could not fix up the shelter because it did not own the property.

"It is completely up to the District" to improve the property, according to Dale Bruce, a spokesman for the regional office of GSA.

The Community for Creative Non-Violence has been operating the shelter at 425 Second St. NW and has long sought federal money for improvements to the structure. The federal government, however, has been trying to close the facility because of its dilapidated condition and move residents to a new shelter opened by HHS in Anacostia.

Shortly after Christmas, President Reagan overruled a plan by former HHS chief of staff C. McClain Haddow to forcibly remove the residents. Mayor Marion Barry promised last week to spend $250,000 to fix up the shelter.

HHS spokeswoman Claire del Real said the agency agrees that the District is free to make improvements at the shelter.

Mitch Snyder, CCNV director of the shelter, said its heating and plumbing systems and roof need repairs, and that fumigation and more showers and toilets also are needed.

"Federal officials are still saying they plan to close it in the spring," he said. "The president stopped a cold-weather eviction, but we'll have the same problem of where to put all the homeless people this spring."