It's taken three up-and-down years of preparation and a tangle of financial arrangements, but the rehabilitation of the Arlington View Terrace apartments for low-income families finally -- officially -- began this week.

The 77-apartment complex in south Arlington, near the junction of Columbia Pike and Washington Boulevard, is one of four low-income housing projects with a total of 256 units in Arlington that have been in the pipeline for several years and are now moving into development.

Three of them were among the few winners in last March's funding lottery at the Department of Housing and Urban Development. They were awarded the last of the money available at 7 1/2 percent interest for that type of project through the "tandem" program of the Government National Mortgage Association (Ginnie Mae).

In addition to Arlington View Terrace, tandem funding went to the 37-unit Knightsbridge project off Glebe Road and to a tenant group that has bought part of the Colonial Village garden apartments, which is being rehabilitated into a 72-unit low-income cooperative called Colonial Village Commons.

The Arlington Housing Corp., the nonprofit group that is sponsoring the $3 million Arlington View Terrace rehabilitation project, also is preparing to buy another 70-unit portion of Colonial Village from Mobil Corp. and renovate it for low-income tenants.

While that project did not win tandem funding, all the tenants there are to receive "Section 8" rent subsidies from HUD. FHA has given the project an insurance commitment and tax-exempt bonds will be used for financing, AHC and Arlington County officials said. The housing corporation is planning to close on the purchase this month, just in time before its option to buy with Mobil Corp. runs out Sept. 30, the officials said.

But the 256 units of low-income housing at those four projects may be the last for a while, said Edward Brandt, Arlington County housing section chief.

"The crunch is going to hit us in about six to nine months," when the current projects are completed but there is no new funding or projects in the works, he said. With federal funding being cut back, tax-exempt bond financing is about all there is left to the local governments to fund these kinds of projects. But even with the tax exemption, the financing from the bonds have been at interest rates of about 11 to 12 percent, still making it difficult to make low-income housing economically feasible, he said.

Even with the 7 1/2 percent Ginnie Mae tandem funding, the Arlington View Terrace project ended up being syndicated to investors looking for tax shelters, a move the housing corporation made to get other needed funding. The corporation originally had planned to make Arlington View Terrace a low-income cooperative, but decided it was not financially possible. The new partnership formed to develop the project does, however, include two tenants in decision-making positions.

To participate in a syndication, the housing corporation had to form a new corporation to be the managing general partner at the project, joining with CRI Inc. as the money partner putting together the investment group, AHC Executive Director Louann Frederick said. In a syndication, individual investors put in a portion of the funding and receive tax breaks on their share of the project but are not involved in the decision-making.

Arlington View Terrace's current residents will continue as tenants there after the rehabilitation, which is being done in three phases, with completion of the project scheduled for next May.

One of the main advantages of Arlington View Terrace for current residents is that 67 of the 77 apartments are two-bedroom units that can accommodate children, Frederick said. Most of the apartments are occupied by minority-group families.

Other residents are older people, some of whom moved in shortly after the project opened two decades ago, she said

If the housing corporation had not decided to buy the property, the complex probably would have been converted to condominium ownership, Frederick said. "We wanted to keep it for the people who have been here all along," she said.

The housing corporation signed its purchase agreement in September 1979, but didn't go all the way to closing until this month. All the renovation plans were completed more than a year ago, but AHC had no financing, having missed out in one round of Ginnie Mae tandem funding at the time.

"One year ago, deep down inside we were not sure it was going to happen," said AHC President John W. Shanley at a ground-breaking ceremony this week for Arlington View Terrace.

In looking to the future, Shanley said the housing corporation -- along with others involved with low-income housing -- has been forced to reduce its reliance on federal funding, and AHC has formed a committee to look for new sources.