Home buyers and renovators coming back into the market as interest rates ease will soon find an additional boost available from the government if they want to install certain solar energy or energy conservation options, but they had better be prepared to move quickly.

The first loans made through Department of Housing and Urban Development's Solar Energy and Energy Conservation Bank could be issued early next year, but the HUD official running the program expects it to be around for only "a year or so." And even if the bank is granted a long life -- a matter to be decided by the courts almost as much as by Congress -- the $20 million in the first fiscal year, well underway by then, will be gone swiftly as 20 to 30 states, including Virginia, Maryland and the District, are expected to participate.

Robert W. Karpe, already in charge of the Government National Mortgage Association (Ginnie Mae), has been named by President Reagan to head the new lending arm at HUD. In a recent interview, Karpe said he wants "to get the money in the hands of the states who now have existing programs which are intelligently using those methods of conserving energy and passive solar -- matters that will be most beneficial in their areas."

To do so, HUD has issued requested proposals from the states to have them set up lending programs for lower- and middle-income owners of single-family dwellings to equip their homes with conservation measures, such as insulation and storm windows, and passive solar systems. "Passive" means that only systems requiring no pumps or other moving parts are acceptable, which has the effect of excluding most types of solar hot-water heaters. Money from the solar bank, which was created by Congress under the previous administration but delayed first by Jimmy Carter and then by Reagan, would go to the states to be used as "an inducement in the form of, perhaps, a buy-down of interest or principal," Karpe said.

HUD's solicitation of proposals has drawn criticism from a number of groups for relying on the states as the only direct conduits of federal funds. However, Karpe explained, "We do not want to create a big bureaucracy. That's the reason we're giving it to the states..., to spur their existing programs [which] they can continue doing without our help in the future."

He added that "we are not really capable of dealing effectively with thousands of entities. We believe that the states are responsible." Among the "qualified organizations" through which the states can work are utilities, banks, savings and loans, credit unions, cities, counties and special entities.

Another complaint that is being filed with HUD in comments on the program is on the exclusion of many domestic hot-water heaters and other active solar systems. While there are passive water heaters available -- which, according to Department of Energy's National Solar Data Network, often outperform the active systems in some areas -- the majority of the country's solar system manufacturers would be left out, groups such as the Solar Lobby note.

The Solar Lobby also insists that the position of president of the bank should be a full-time job. The group says it will oppose Karpe's nomination on that ground alone when it comes before the Senate, possibly in the lame duck session later this month.

In his defense, Karpe said, "I am a manager.... The most important job of management is to select excellent people. If one has excellent people in any organization, things are likely to go well; if one does not, it is almost impossible to have effective organization." Karpe's staff includes Richard Francis, formerly of DOE and now full time as the bank's executive vice president, along with other officials from DOE, National Science Foundation and elsewhere.

The way that HUD went about setting up the bank, as well as the slowness in getting it running, are now before a District Court judge in New York City. The plaintiffs -- whose ranks include congressmen, cities, one state, energy and consumer groups, and individuals -- are asking the court to announce by Nov. 15 a date when HUD will draft and submit final regulations. Defendants include the president and five cabinet officers who serve on the bank's board of directors.

Meanwhile, the proposals from states are about to come in. Among the 20 to 30 states from which Karpe expects to hear (some participants expect more states to respond) are the District, Virginia and Maryland.

Anton Wood, chief of regulatory affairs in the D.C. Energy Office, said the city plans two programs. One, supported by taxable bonds (HUD rules prohibit use of tax-exempt bonds), would operate through the Housing Finance Authority, offering a reduction of either interest or principal.

A second program would use solar bank money along with unspecified city funds and Urban Development Action Grant (UDAG block grant) for a direct grant to residents of the district under the city's low-income assistance program. Both types of solar bank funding would be predicated on the recipient first getting a home energy audit under DOE's Residential Conservation Service program. Unlike those in most states, the District's RCS audits are free.

In Virginia, says Temple Bayliss of the state energy office, the loans would be directed primarily at residents whose incomes are less than 80 percent of the median in their respective counties. Federal money would be used to reduce the interest rate, to zero if possible. Loans of $500 to $3,500 would be for seven years and would be obtained through Virginia's Housing and Development Authority.

In Maryland, residents interested in obtaining loans would apply to their local utility to get solar bank funds, which would be used to reduce principal payments. Here, the size of the loan would follow HUD's maximum levels of up to $1,275 for people with incomes of less than 80 percent of the county median, up to $875 for those with 80 to 100 percent of the median, to $750 for those earning 100 to 120 percent and to $500 for those earning 120 to 150 percent.

As with the other states, approval by HUD is still required. And with the District, alone, asking for $3.5 million, the competition among proposals could be fierce.