Due to an editing error, a statement about apartment buildings with balloon mortgages was incorrectly attributed in last week's Real Estate Section. It should have quoted William Sinclair, president of Perpetual American Savings and Loan Association, as saying that some landlords are turning these buildings into tax shelters so that investors can take advantage of the negative cash flow as a tax writeoff.

A number of landlords in Washington and across the country may lose rental apartment buildings to their lenders because low-interest balloon mortgages on these projects are starting to come due, real estate experts say. Eventually tenants are likely to have to pay higher rents or deal with rapidly deteriorating housing because of the situation, they predict.

With a balloon mortgage, owners gets a fixed rate for between five and 15 years and then the balance of the loan is due, generally meaning it has to be refinanced. Five to 15 years ago, landlords thought that rates would go down over the period, but instead they have skyrocketed.

"We do visualize a significant number of apartment buildings around the country going into default," said John O'Neill of the Apartment and Office Building Association of Metropolitan Washington. "It's a major problem. . . . Some of these loans are due now; some will go into default by the end of the year."

The need for landlords to refinance low-interest balloons may mean higher rents if owners can pass the costs on to renters, and deteriorating or abandoned buildings if they cannot. Some may try conversions to condominiums, while others will find a lender take over as landlord.

It may prove difficult for apartment building owners to raise rents significantly to cover new refinancing costs. Vacancy rates have been rising in the Washington area, particularly with a number of unsold condominium units coming onto the rental market, and rents generally have softened.

Balloon mortgages written five to 15 years ago on apartment buildings carried a rate of between 7 and 9 percent. Those coming due now would have to be refinanced at perhaps 16 percent. To make up all the increased mortgage costs, rents would have to rise by between 50 and 100 percent, O'Neill said.

Michael Sumichrast, chief economist at the National Association of Home Builders, estimates that balloon mortgages affect between 10 and 20 percent of all multifamily housing nationwide. This is the same estimate O'Neill gives for this area, but he says they are more likely to be in the suburbs because the apartment buildings in the city tend to be older.

For lenders, it could mean multi-billion-dollar losses on these projects, Sumichrast said. If landlords or investors in apartment buildings feel they cannot refinance, they may simply let them deteriorate and eventually let lenders take them over, he predicted.

Across the country, there is an estimated $15 billion to $30 billion in apartment balloon loans, O'Neill said.

According to a recent survey by Advance Mortgage Corp. of Detroit, New York City alone has more than $1.5 billion in apartment balloon loans that will come due between 1982 and 1984. Washington D.C. is the other market it cites as facing a "substantial balloon problem" soon.

"Owners are talking defaults and abandonment," the survey said. "Negotiations between lender and owner groups are being held."

The National Association of Home Builders has been holding meetings, trying to find a solution for the dilemma. So far, the landlords appear to be hoping to be saved by the lenders or by federal or state bailouts.

"We're looking for the government to recognize it as a national problem and salvage these projects," perhaps with subsidized loans, O'Neill said. Lenders might be willing to forebear or compromise on interest rates because they don't want to own real estate and would find it difficult, if not impossible, to sell the projects at today's rates, he added. State governments have shown more interest than the federal government in dealing with the situation, O'Neill said.

William Sinclair, president of Perpetual American Savings and Loan, said his institution made many five-year balloon mortgages on apartment buildings in Maryland and Virginia in the mid- and late 1970s, and they are coming due now.

Some landlords are turning the buildings into tax shelters, with investors in a limited partnership able to take advantage of the negative cash flow as a tax write-off, he said.