A story in yesterday's Metro section about a homesteading bill approved by a D.C. City Council committee incorrectly stated that homesteaders would have to pay back taxes on the properties they acquire. The bill requires them to pay all taxes on the property from the date of settlement.

A D.C. City Council committee approved a new program yesterday designed to turn over abandoned and dilapidated houses and apartments to city residents willing to make repairs and live in them for at least five years.

The homesteading program would enable the District government to acquire housing when owners are delinquent for more than two years on their property taxes. The city then would sell the properties for $250 a unit to persons or organizations willing to pay the back taxes and repair the housing. At least half the new owners would have to be low- and moderate- income families or groups.

Cooperative associations, tenant associations and nonprofit groups could buy apartment buildings.

The homesteaders also could get $10,000 a unit in loans to make repairs and would not have to make repayments until the property is sold.

Under current law the city government cannot take title to properties with delinquent taxes or outstanding city liens placed when the government pays for repairs or fuel. Run-down properties can continue to deteriorate and accumulate back taxes if the buildings attract no private bidders. Under the program, delinquent property owners would be able to pay their back taxes and redeem their property up until the time the city took title.

Council member Frank Smith (D-Ward 1) introduced a homesteading bill on Feb. 27 with a majority of the 13 City Council members as cosponsors. The version approved yesterday by voice vote in the council's Housing and Economic Development Committee was a modified plan, drafted after negotiations between Smith and Charlene Drew Jarvis (D-Ward 4), the committee chairwoman, who offered the substitute bill.

Mayor Marion Barry's administration supported the program as approved by the committee, according to a committee document.

Smith's original proposal would have limited sales to low- and moderate-income persons, but under the committee-passed plan there are no income limits imposed on buyers. The legislation would require that at least half of the units in the program, and at least 25 percent in each building, would go to low- and moderate-income persons.

Smith said at the committee meeting yesterday that he was satisfied with the modified bill, saying it would help low-income people "share in the excitement and development" of a real estate upturn in the city.

"The bill has enormous potential for home ownership for low- and moderate-income families because . . . the mortgage is nonexistent," Jarvis said.

The chairwoman acknowledged that $10,000 may not be enough to rehabilitate many of the abandoned and rundown units, but she said other programs to help lower-income persons foot the cost may be available through the city's housing department.