Ten months after it first raised the issue, the Internal Revenue Service has finally informed the Housing and Urban Development Department that it can roll over the tax-exempt notes the department has issued over the years to finance public housing.

But it seems to have been a case of closing the barn door after the farmer decided he could get along without the horse.

HUD announced late last month that it isn't going to issue any more of the notes. Instead, it will seek legislation allowing it to give public-housing authorities grants for construction and rehabilitation. Previously, HUD had lent the housing authorities the money, raising it through the sale of one-year tax-exempt notes.

The new grant approach has been included in the House version of this year's housing bill (H.R. 1) and seems to enjoy wide support.

The impetus for change came late last summer, when the IRS informed HUD that recent tax-law changes had raised questions about the tax exemption of the housing notes. Naturally, any such question scares away buyers, so beginning last August, HUD was forced to buy up the notes as they came due -- to the tune of $1 billion or more a month.

As months went by and the IRS provided no clarification, suspicion grew among some public-housing officials that it was, as HUD general counsel John Knapp put it, "a device to kind of backhandedly . . . close down the public-housing program" by creating the immediate need for an enormous outlay.

However, Knapp said last week that since the department announced that it is ending the program, he has heard no complaints. "Maybe they've gotten to the point of more or less accepting that the administration is not turning its back on the modernization needs of public housing," he said. THE MARKET AT WORK

*T he Fair Housing-Fair Lending Legal Service, a publishing service halted in 1983 by Prentice Hall Inc., is being resumed in early August, according to Knapp.

The service will publish court decisions, agency rulings, federal, state and local statutes, speeches by government officials and other material dealing with discrimination in housing and lending.

Prentice Hall began the service in the early 1970s, with an initial commitment by HUD to buy a certain number of subscriptions, Knapp said. HUD also had a hand in determining the "general coverage," he added.

The service was not a commercial success, and Prentice Hall discontinued it "without warning," Knapp said. The publishers "just didn't get enough subscriptions," he said. "There are not all that many people who are active in this field."

But attorneys and others protested that the publication was "a valuable tool and the only one of its kind," Knapp said. After discussions with HUD, the publisher agreed to resume the service if HUD guaranteed that it would order 1,000 subscriptions the first year, Knapp said, at $282 each -- somewhat lower than the subscription price to nongovernment groups.

Prentice Hall, Knapp added, agreed to form an editorial advisory board of people involved in fair-housing efforts around the country in the hope that this would generate interest in the service "and give people in the field a stake in the commercial success" of the publication.