Mayor Sharon Pratt Dixon's search for increased federal aid to the District yielded results yesterday when Jack Kemp, secretary of housing and urban development, announced that his agency was immediately releasing $10 million in funds to help renovate abandoned housing units.

The announcement came at HUD headquarters after Dixon and Kemp met for more than an hour in the secretary's office.

The funds are part of $20 million in federal grants that HUD withheld from the District last year because of federal concern about financial mismanagement at the District's housing authority, according to Kemp. He indicated that his agency's attitude had changed with the city's new administration.

Kemp said the remaining $10 million would be released when representatives from HUD and the District's housing department draw up an agreement on how the money will be spent.

Noting that one of Dixon's campaign pledges was to take the boards off 2,000 abandoned housing units, Kemp said, "I can't imagine a more important goal in the District than helping this mayor be successful."

Dixon said that most of the money would be spent renovating units in Ward 7 and other areas east of the Anacostia River.

"Those are the areas that are especially hard hit, and we've got to make it a real priority," she said. "I'm delighted."

Yesterday's announcement left unresolved one major issue: a HUD audit's recommendation last year that the District repay $8.8 million to the agency for mismanaging money that was to be spent on repairing and renovating housing units from 1976 to 1988.

"The $8.8 million {in proposed repayments} is not linked to the $10 million" released yesterday, said Anthony Mitchell, a HUD spokesman. "How {the repayment issue} will ultimately be resolved and handled is still being reviewed."

The tone of yesterday's meeting was cordial.

"I'm absolutely convinced that the mayor is going to be able to fulfill her commitment," Kemp said. "She has a total open door."

Kemp also said that he was ordering Art Hill, head of the Federal Housing Administration, to begin reviewing a list of distressed properties in the District owned by the FHA and the Resolution Trust Corp., among other federal agencies, with the aim of seeing which ones could be made available to low-income families quickly.

Also yesterday, Dixon met with Senate Majority Leader George J. Mitchell (D-Maine) and discussed her request for $100 million in emergency federal funds to help close the District's budget deficit. Mitchell said Dixon has gotten off to an impressive start as mayor and that she has many supporters on Capitol Hill. However, he made no promises about financial assistance.

Staff writer Mary Ann French contributed to this report.