In the wake of a scandal that exposed the Department of Housing and Urban Development as Chicago's largest slum landlord, the agency has begun a campaign to help break the pattern of segregated housing on the South Side.

Under a demonstration program, all prospective home buyers who seek Federal Housing Administration-backed mortgages for properties in the changing Marquette Park area will be given financial counseling before hand and be advised of housing available elsewhere. The counseling is intended to reduce the foreclosure rate and maintain integrated neighborhoods.

The program was instigated under pressure from civil rights groups, including one called Business and Professional People for the Public Interest. Alexander Polikoff, head of that organization, brought suit in 1966 against housing officials in Chicago, charging that their policies fostered segregation.

The case utilmately went to the Supreme Court, which upheld a lower court finding for the Polikoff group. The court held that HUD must consider housing needs on a regional, rather than a citywide, basis.

In the Polikoff suit it was determined that HUD was working against its principles by approving and financing Chicago housing plans. During the trial, the federal judge called HUD was the "largest owner of abandoned slum buildings" in Chicago. Will said the agency catered to the interests of mortgage companies rather than low income homeowners. HUD was left with many foreclosed FHA-backed properties on its hands.

Marquette Park was a virtually all white, blue-collar community up until about two years ago. Then a three-by-twelve block section bordering on a black area began to "turn." The section is now half black.

The demonstration program is confined to advice; it cannot mounmt affirmative action programs by recruiting racially and financially desirable home buyers for Marquette Park.