The District faces at least a $2.5 million annual shortfall in financing for emergency housing assistance if proposed federal guidelines are adopted, city officials said.

The proposed U.S. Health and Human Services guidelines, which could take effect before the end of the year, would reduce from 90 to 30 the number of days the city can be partly reimbursed for providing emergency housing for the homeless.

The proposal has brought sharp criticism from advocates for the homeless, who say they fear homeless families may be pushed out into the street if city administrators decide not to make up for the loss in federal funds.

"We are here out of desperation," said Mitch Snyder, founder of the Community for Creative Non-Violence, at a press conference yesterday afternoon. "Families are going to end up in the streets."

But D.C. Council member H.R. Crawford (D-Ward 7) said Initiative 17, overwhelmingly approved by District voters in 1984, requires the city to provide assistance to all homeless persons and will force the District to raise additional funds if the federal proposal is enacted.

"There is no way that we can just force people out who have no place to go, so . . . this particular law is going to cost the city a great deal more," Crawford said.

Under current guidelines, the federal government pays for 50 percent of the cost of housing the homeless in shelters or hotels under contract to the city for as many as 90 days. The proposed new regulations would maintain the 50 percent reimbursement, but for 30 days only.

Between 500 and 600 families are now in emergency temporary housing provided by the city, at a budgeted cost of nearly $14 million a year. And because of an increasing number of homeless persons who have come to Washington, city officials say the shortfall estimate of $2.5 million is a conservative one.

Snyder said he had talked to one official who estimated that the city may have to raise $4 million every year to make up for the loss in revenue. "The worst-case scenario is fewer shelter spaces," Snyder said.

Crawford said a majority of the homeless in city shelters stay at least six months.

"We are getting an influx of families who are relocating," Crawford said. "Some families have been in our facilities for more than an year."

The new regulations are expected to be published in two weeks and would take effect 90 days later.

Maria Foscarinis, Washington counsel to the New York-based National Coalition for the Homeless, said the cutbacks threaten not only the traditional street person, but entire families, the fastest growing segment of the homeless population. Foscarinis said the number of homeless families nationwide is growing by as much as 25 percent a year.