Gov. Harry Hughes initiated a long-awaited program today to give depositors at two financially strapped Maryland thrifts some access to their money that has been frozen for months under court order.

The plan applies to many of the approximately 73,000 depositors at Old Court Savings and Loan in Baltimore and 30,000 depositors at Community Savings and Loan of Bethesda, two of six thrifts in Maryland where deposits are frozen.

The Maryland Deposit Insurance Fund, a state agency administering the program, will mail instructions and application forms to all depositors at the two institutions within two weeks, state officials said.

Only depositors who can prove they have severe needs, such as emergency medical care, property settlement payments, college tuition and funeral expenses, will be able to recover some of their money.

The plan was immediately approved by Baltimore Circuit Court Judge Joseph H.H. Kaplan, who has jurisdiction over the two savings and loans.

Hughes has said he would consider a similar plan for First Maryland Savings and Loan of Silver Spring, one of the other thrifts with frozen deposits. Hughes did not include the other three thrifts with frozen deposits -- Merritt Commercial of Baltimore, Friendship S&L of Bethesda and Chesapeake S&L of Annapolis -- because he is hoping they will be purchased by Chase Manhattan Corp. of New York, an arrangement that needs legislative approval.

About a dozen other thrifts, with some restrictions on withdrawals, also are unaffected.

While lawmakers said they were relieved that progress was being made to unlock deposits, some legislators, as well as some depositors, objected to restrictions that would force depositors to demonstrate their need to get access to their own savings.

"We can't be against it, but it puts a big scarlet letter on the chests of depositors," said Joe Mann of Columbia, who has several years of savings tied up in Community. Depositors "can't get to their money and now they've lost their pride. They have to beg for their money."

Del. Joan Pitkin (D-Prince George's) added, "It looks like you have to be on welfare to qualify."

Others, like Del. Ida Ruben (D-Montgomery), said, "I think it's a start. You wouldn't believe the calls I've been getting -- it tears your heart out. It finally looks like we're going to help some people."

Under Hughes' plan, depositors will be required to certify that the funds are needed immediately, that the money will be used for the stated hardship and that no other resources, including alternate financing, are available.

Hughes pledged that a specially trained team of up to 60 state employes will review the applications and distribute the checks.

"We feel it is essential to have people who are sensitive to the problem and who will be well trained," he said.

Asked how long it would take to get the program established, he said, "It's not going to be Monday or Tuesday. It's probably going to be at least two weeks. We have to make sure everything is set up properly."

The hardship categories also include long-term institutional care and such "necessities of life" as rent, mortgage payments and home repairs, providing the depositor can prove financial need.

State officials also included a miscellaneous category to "give conservators some flexibility to address hardships that don't fall neatly into these categories," Hughes said.

Applications under the miscellaneous category will be reviewed by a three-member panel that will make a recommendation to the director of the program.

Even within these categories, some further restrictions apply. Under tuition expenses, for example, depositors may withdraw a total of $15,000 per scholastic year, regardless of the number of students for whom application is made. And depositors may withdraw only up to $5,000 for funeral expenses.

Hughes said, however, that depositors may apply to the fund under more than one category.

Money to pay depositors will be drawn from existing cash and assets at Old Court and Community, Hughes said.

If that amount is not sufficient, the institutions may borrow from MDIF. If necessary MDIF can itself then borrow from other financial institutions.

MDIF Director Melville Brown said it is almost certain that he will have to use insurance funds, but he could not specify how much.

"The dollar amount could be tremendous," he said. "We have to assume the worst-case scenario, that everybody will apply."

Some details of the withdrawal plan remain unclear, including how much it will cost to pay all the claims and how many people will be able to withdraw money.

Business accounts apparently are not included, sparking concern from depositors' groups that some legitimate hardships have gone unnoticed.