By October they expect to put up a SRO sign on New York's Manhattan Plaza, the first federally subsidized housing complex for members of the performing arts.

Since the curtain went up June 1 on the first of two 45-story, red brick towers in the heart of the city's theater district, more than 5,000 applications for the 1,699 apartments have been received.

Some 350 apartments have been rented to actors, dancers, singers, musicians and stagehands. The second tower will welcome its first tenants starting Aug. 1.

Already you might run into "Hair" producer Michael Butler, child actress Andrea McArdle of "Annie," or soap opera queen Ruth Warrick, the Phoebe Tyle of "All My Children" in the halls or rehearsal rooms. Other residents include producer Viola Rubber, jazz musician Russel Procope, who played in Duke Ellington's band for 28 years, and several members of the New York City Ballet and the American Ballet Theater.

The criteria for moving into Manhattan Plaza are so strict that only four persons in 10 are accepted, a spokesman said. Fifteen per cent of the units are alllocated for low and moderate-income senior citizens, and another 15 per cent for citizens, and another 15 per cent for residents of the area just west of Times Square that was once known as Hell's Kitchen. Seventy percent of the space in the buildings on 43rd Street between 9th and 10th avenues is reserved for performing arts people.

To qualify, an individual must prove that he or she has "actively pursued" a performing arts career for the last three years, or that more than half of his or her annual income has come from the entertainment business over that period, or the applicant belong to a "professional performing arts organization."

An unpublished playwright would be considered for the building, but an acting student most likely would not, according to the screening committee. Managing director Richard R. Kirk, who is an Episcopal priest, said they weed out so-called models with no apparent source of income, but would consider taking a stripper if she(or he) were legitimate.

Moreover, in order to qualify for a so-called Section 8 rent subsidy from the Department of Housing and Urban Development, residents must have low or moderate incomes. One-tenth of the apartments are rented at the fair market value ($684 for a two-bedroom to successful artists like Butler and McArdle, but the other 90 per cent go to persons with incomes under a maximum of $18,000 a year for a family of four.) They receive subsidies to make up the difference between 25 per cent of their gross incomes and the fair market value of the apartments.

Because of the high rate of unemployment in the performing arts, applicants are expected to have savings to tide them over empty periods. Finally, the performers - most of whom are young - must be tolerant of and friendly toward the elderly residents, Kirk said.

This government-subsidized home for performing artists, believed to be unique in the country, came into being as the result of unique circumstances. Manhattan Plazza was originally conceived in 1973 as an upper middle income residence. The $95 million complex was financed by a $90 million mortgage loan from New York City.

But then the city's financial crisis, the recession, the energy crisis and later the soaring cost of construction brought the uncompleted project to a halt. In July of last year developers, Ravitch and Horowitz, agreed with city planners that Manhattan Plaza should become a limited-profit, federally subsidized complex.

It was builder Daniel Rose, developer of the planned Pentagon City project here, who suggested a home for performing artists. The Broadway Association, which represents major business and real estate interests in midtown, opposed the idea on the grounds there would not be sufficient demand and Manhattan Plaza would turn out to be another development for the poor.

Yet, with the help of the major performing arts organizations and unions. Rose did a survey and got rephes from 4,000 eligible persons who said they might like to live there.

Manhattan Plaza is now a keystone in the 42nd Street Revelopment Corp.'s plans for cleaning up the center of New York. And just in case you're wondering if the live sex show entertainers and peep show operators who now people the Times Square area qualify for the new complex, Kirk's answer is a resounding "no."