The National Collegiate Athletic Association, which collects millions of dollars a year on behalf of the nation's colleges and universities, has used some of its money to provide more than $600,000 in no-interest mortgage loans to its staff members since 1978, according to mortgage documents.

In addition to the no-interest loans, the NCAA has locked up another $455,000 in low-interest bank accounts so its employes can obtain additional loans at interest rates of 7 percent or less from those banks.

The NCAA, which enforces regulations concerning the recruitment and conduct of college athletes, is also a major money manager for its 900 member institutions. The bulk of its money comes from the sales of broadcast rights and tickets to championship games. In turn, most of the money -- 64 percent this year -- is returned to colleges, where the money helps offset the need for more tax dollars, higher tuition and more donations.

The NCAA is not like a private company; "It is our money in a sense," said William H. Baughn, the acting chancellor and former business school dean at the University of Colorado and an NCAA Council member. He said he had not known about the loans and disapproved of them. However, the loans were approved by the NCAA executive committee, which is the decision-making body for business matters.

The NCAA loans to its staff members do not violate laws and are defended by the organization as a way to retain top professionals who might be lured away by other employers. In fact, many organizations sometimes offer loan assistance, for example to offset housing costs for new employes moving from other cities. The NCAA loans have been issued to existing employes.

Though mentioned in footnotes to the NCAA's annual report to members, the loan program is largely unknown among member colleges, according to athletic officials and members of several NCAA committees, including NCAA treasurer and Auburn University professor Wilford S. Bailey.

Mortgage documents also show the NCAA's primary bank had loaned more than half a million dollars to two key NCAA staff members -- Walter Byers, the top executive of the NCAA, and Louis J. Spry, the controller. Some bank officials and regulators have said the interest rates and other aspects of these loans represent preferential treatment.

When a Washington Post reporter described the agreements in Byers' and Spry's loans to NCAA President John R. Davis, he said he did not know about those loans and initially said they appear to be unusual banking practices. The loans "cause enough questions to be raised that we would want to determine whether or not there were conflicts of interest," Davis said.

However, Davis, who is director of special agricultural programs at Oregon State University, said a week later, after talking with Spry and Byers, that "I'm satisfied there is not a conflict of interest. I don't see any problems with" the loans.

The transactions include a $500,000 loan to Byers' ranch corporation from United Missouri Bank of Kansas City -- the only bank authorized to receive unlimited deposits from the NCAA, which has an annual cash flow of more than $40 million a year. In 1981, the unpaid balance of the loan, $485,000, was due. That year, at a time when United Missouri's prime rate to its best corporate customers was more than 16 percent, the loan to Byers' ranch was extended at an 8 percent interest rate.

A statement issued by the NCAA said, "It is incorrect to suggest that Mr. Byers receives preferential treatment from the bank because he is an NCAA employe." The statement said Byers and his family have other financial interests that were a factor in the lending agreements.

Byers, the top NCAA executive for 33 years, will not answer questions about the loans, according to David E. Cawood, assistant executive director of communications. Cawood said his office would answer questions if they are submitted in writing. He did answer written questions but declined to disclose the policies on the no-interest loans or identify the maximum amount an employe can borrow.

Since Byers was named the NCAA's first executive director, the NCAA has grown from fewer than 15 employes in a small suite of offices in downtown Kansas City, Mo., to 115 employes in NCAA's two-tower office complex in the wealthy suburb of Mission, Kan.

During that time, Byers' name has become synonymous with the NCAA. As the only executive director in the history of the NCAA, he has had a more consistent, dominant role than the officers representing, and elected by, NCAA schools who serve only a few years before being replaced by new faces. College athletic officials call him powerful, respected and "one of the top executives in the nation."

The NCAA does not disclose staff salaries, but the NCAA federal tax return is open to the public because the organization is tax-exempt. The latest available return states that Byers' compensation was $78,450 for the year ending Aug. 31, 1983.

Through the years, Byers gradually has increased his ownership of ranch land in the rolling hills of northeast Kansas. His ranch, Byers/Seven Cross Ranch Inc., owns at least 2,800 acres, and Byers personally owns an additional 821 acres, according to Pottawatomie County tax records.

In 1978, Byers used the ranch to secure the $500,000 loan from the United Missouri Bank of Kansas City. According to county records, the loan had an 8 percent interest rate, fairly typical at the time. But, when the loan became due in 1981 with an unpaid balance of $485,000, United Missouri's prime rate had soared to 16 3/4 percent.

Byers' loan was extended with the following terms: "Interest shall be established at the rate of 8 percent, and shall be adjusted on June 1, 1982, and June 1, 1983, to the prime rate being charged by United Missouri Bank of Kansas City, N.A., on those dates, but in no event shall the interest rate exceed 8 percent per annum."

With an unpaid balance of $455,000, Byers' loan was extended last year for three more years at 8 percent interest. The bank's prime was 12 1/2 percent.

Tom Fitzsimmons, Missouri's commissioner of finance and the state's chief bank regulator, said, "Obviously, those are awfully lenient interest rate terms."

Steve Geary, associate general counsel to the division of finance, said, "Sure, it was a preferential loan." He emphasized, however, that the bank did nothing illegal or improper in offering the loan.

The chief loan officer for United Missouri, William Bolt, said that, in a competitive banking environment, an executive such as Byers who represents an organization with large sums of money might be viewed differently when a bank extends a loan. "It is going to color our opinion," Bolt said.

He said many loans were extended during the high-interest period of the early 1980s at rates below prime. The bank wanted to maintain "good will" during a time of temporarily high rates, he said.

An NCAA statement issued in response to written questions stated, "Considering the substantial value of the financial transactions carried on by the Byers family, its ranching operations and Mr. Byers personally, and also considering other land loans Mr. Byers has with other than United Missouri Bank, it appears that the Byers family arrangements are fully consistent with customary banking loan practices."

The statement also said that Byers does not select the NCAA's banks or participate in handling investments with the controller and the investments committee.

Spry, the NCAA controller and the employe most closely involved with investments, also has obtained loans from the organization's lead bank. In 1982, Spry asked United Missouri to sign over its rights as first mortgage holder on his house so he could obtain a $58,000 no-interest loan from National Collegiate Realty Corp., the real estate subsidiary of the NCAA. United Missouri acceded to the request, altered terms of the original loan to permit early payments without penalty and granted Spry an $8,300 third mortgage loan, according to mortgage documents.

When asked if the actions by United Missouri were unusual, Spry said, "I don't really know. . . . If you're saying there is some kind of a sweetheart deal, I have been banking at that bank for 23 years.

"I like to think my credit rating down there is pretty good. I don't think they would make that kind of loan to someone walking in off the street, but they made that loan to an individual who had a 23-year banking record with them."

Until Nov. 8, when he sold the property, Spry owned another house that was financed by a second bank where the NCAA has placed colleges' money in passbook savings accounts. Missouri Bank and Trust granted Spry $51,000 in mortgage loans with the interest rate set at 1.5 percentage points above the passbook rate. In 1981 and 1982 when the loans were granted, Missouri Bank and Trust was paying the NCAA 5 1/4 percent on savings accounts and charging Spry 6 3/4 percent for his loan; last year the rates went up by one-quarter point.

While Cawood would not disclose the NCAA policy on no-interest loans, he did so for the low-interest loans:

An employe may borrow up to one-half of his or her annual salary for a period not to exceed five years for "purchasing or improving the employe's residence, purchasing a necessary automobile, satisfying a home mortgage or an automobile loan, educating the employe or members of the immediate family or for personal expenses of a catastrophic nature," the policy states. "Loans for investment, speculation, recreational or business purposes will not be approved."

The no-interest and low-interest loans given to employes by the NCAA are part of a program begun in 1978.

For example, Cawood, an NCAA employe for 11 years, was making payments until 1983 on a $57,000 mortgage loan from a Kansas savings and loan at an undisclosed interest rate. He also had a $7,400 low-interest second mortgage made possible by the NCAA's special arrangement with Missouri Bank and Trust Co. The interest rate was pegged at 1 1/2 percentage points above the bank's passbook savings rate of 5 1/4 percent, according to mortgage documents.

In October 1983, Cawood received $49,000 from the NCAA as a no-interest loan. At the same time, he borrowed $21,000 from Missouri Bank as a second mortgage, again at 6 3/4 percent interest, or 1 1/2 percentage points above the passbook savings rate. Those loans enabled him to pay off his two previous mortgages.

Once authorized by the NCAA executive committee, the loan program has been administered by Byers and Spry subject to the consent of the executive committee, Davis and Cawood said.

The committee itself handled no-interest loans to Byers. On April 15, 1977, Byers and Betty J. Sooby bought a home in the Kansas City suburb of Mission Hills, Kan. In May of that year, a few days before they were married, Byers deeded the property to his wife-to-be, and they signed a prenuptial agreement, records show. The first interest-free mortgage loan of $75,000 was made to Byers on Nov. 9, 1978.

On May 14, 1982, Byers filed for divorce and eventually agreed to continue holding the loan on the property for a year, or until the house was sold, divorce records show. Eleven days after filing for divorce, Byers bought another home and eventually received a second no-interest loan of $118,000 from the NCAA, according to mortgage documents. The first loan has since been paid off.

The executive committee decided to approve the two loans because Byers had to maintain two homes for a period of time, Davis said.

Mortgage documents indicate there are at least eight no-interest loans to NCAA employes.

According to records in the Johnson County, Kan., and Jackson County, Mo., courthouses, the loans were issued by the National Collegiate Realty Corp., the real estate subsidiary of the NCAA that was formed to hold title to the NCAA offices and other properties. The mortgages are filed in the name of the corporation, not the NCAA.

For example, when Stephan R. Morgan, the chief of enforcement for the NCAA, received a loan, documents state he and his wife "promise to pay to the said National Collegiate Realty Corp. . . . the sum of $46,000 due June 5, 1995, with interest to maturity at the rate of no percent." The NCAA never is mentioned in the document.

But documents filed with the State of Kansas list no mortgages as being held by the realty corporation. Cawood said the realty corporation "makes no loans and consequently shows none on its annual reports to the State of Kansas." The money comes from the NCAA, he said.

The realty corporation is required to file an annual report with the Kansas secretary of state. From 1978, when Byers' first received a no-interest loan, until the most recent annual report was received last year, the corporation disclosed no mortgage and real estate loans. The reports were signed either by Spry or by Byers. If the loans had been listed as an asset, the corporation would have owed slightly more -- less than $1,000 -- in franchise taxes during some years.

Spry said that, on advice of the NCAA attorney, the mortgage loans are not listed as assets of the realty corporation, but as assets of the NCAA.

In turn, the NCAA attorney, George Gangwere, said there are problems with an unincorporated association with many members, such as the NCAA, holding title to property, and therefore, the title company that handled the transactions wanted all the documents to list the realty corporation as the lender.

Jeff Southard, Kansas deputy attorney general, said that, in his opinion, an organization should not claim that loans are issued by one entity in filings with county governments and by another entity in reports to state government.

"They can't have it both ways," he said. "It's got to be treated the same all of the time.