The first federally subsidized loans for conservation and renewable energy home improvements could be issued within two months as the District, Maryland and Virginia, along with 48 other states and U.S. territories, begin final negotiations with the Solar Energy and Energy Conservation Bank.

The last obstacles to the Department of Housing and Urban Development program were cleared last Tuesday, when Congress permitted HUD to publish modified regulations for the bank.

The House Banking Committee and HUD had differed sharply on the nature, funding and duration of the bank. Congress had approved almost $42 milllion for fiscal 1983, only to see the Office of Management and Budget transfer $11 million of that to low-income energy assistance under the Department of Health and Human Services. Earlier, when HUD released its regulations, the House panel blasted them as too limiting and held them up.

After repeated but unsuccessful attempts to get HUD to change course, the housing subcommittee in the House simply rewrote the regulations when it approved a fiscal 1984 authorization of $100 million. The full committee went along, making more changes for next year, but waived the congressional review period in order to get the program underway using the compromise set of rules from HUD.

It seems unlikely that the bank will get the full $100 million next year. The Senate HUD authorization bill has no such provision, and the Reagan administration wants to terminate the program, whose origins date back over eight years. The House Appropriations Committee approved $25 million for the year beginning Oct. 1 and returned the $11 milllion to HUD, but there are separate proposals before Congress to increase the funding considerably beyond even $100 million. Because the bank operates on a two-year funding basis, some $20 million of the money HUD already has could be spent next year, along with new funds.

With the regulations published, HUD is sending out letters of cooperative agreement to the 51 states and territories that will administer the program. With these contracts in place, HUD will negotiate final details of the proposals and follow up with letters of credit transferring the money. Solar Bank Vice President Richard Francis says the first loans could be made as soon as July 1.

Although the three local jurisidctions may not be able to act quite that quickly, all expect to be in operation by mid-August.

A developed program will be drawn up in Maryland within 30 days, according to Nancy Rase, the deputy director for home improvement of the state's Community Development Administration. Rase said the state plans to use the $830,000 in federal money along wuth surplus operating funds of CDA to provide a reduction in the principal of the loans.

Once a resident of a one- to four-family, owner-occupied home has obtained an energy audit, an application for a $1,500 to $2,000 loan could be made to CDA or to local agencies that will help promote the bank. The audits will be made either through the federal Residential Conservation Service (set up by gas and electric utilities) or through the state's in-house auditing program.

The bank's loans will be aimed at conservation measures, although solar options also will be eligible. The specific interest rate has not been set, but Rase said it will be "very low."

However, even before the solar bank can start up in Maryland, the state will launch its own low-interest conservation and solar loan program on Monday . This program, offering loans of 8 1/2 percent plus a one-half percent insurance premium, will use tax-exempt state bonds for financing.

Rase says this program should run for about six weeks before a second funding is needed. By then, the solar bank should be in place. Next fiscal year, when the congressionally mandated changes in the bank's rules are expected to permit it, the programs could be merged. For now, the bank cannot use tax-exempt bond funding.

Jack Werner of the D.C. energy office says that the city is revising its plan to match the $250,000 it will receive, considerably less than it had requested. The basic program calls for interest prepayment or principal assistance, plus small grants for those in the lowest income bracket who still cannot obtain a loan.

The District's program also will be open to residents of multifamily dwellings, Werner said, noting that 70 percent of the city's housing stock is in that form. The federal funds will be supplemented by taxable bonds, and applicants will be able to seek the help either from banks or the D.C. energy office by late July or early August.

The Virginia Housing Authority's program development officer, Robert Adams, said the state will use its $1.35 milllion to subsidize interest on loans to low- and moderate-income families. Here, too, the emphasis will be on efficient replacement boilers and weatherization, although Virginia's applications forms will have a place for solar equipment funding requests.

Adams said the state has not decided whether to limit the loans to Virginians with incomes under 80 percent of the local median, but the loans certainly will be reserved for those below 100 percent of the local median. The loans will be in the zero to 6 percent interest range for periods of two to seven years and in amounts of $500 to $3,500.

The state's own energy conservaiton loan program has little money left and can make few loans on its own. Adams said that to mix the federal money with state finances, his office will have to issue its first taxable bonds. Those seeking the loans will be asked to apply to the Housing Authority, although he said he is discussing the possibility of lending institutions accepting the applications.

Many of these rules will change when the new fiscal year starts in four months. Revisions demanded by the House Committee on Banking and Housing require the bank to accept loan subsidy requests for both active and passive solar equipment and to let multifamily housing be included. As noted, the D.C. energy office says it already has permission to do so. The changes also would have HUD publish criteria for states to meet in allocating the funds, rather than hold them to a predetermined formula, and HUD would have to redistribute any funds not used by the states.

The committee also voted to allow entitlement communities to apply directly for the money, rather than have them go through the states, to permit state tax-exempt bond money to be used in the program, and to prohibit a state from making an energy audit a prerequisite for a loan. Additional changes voted by the House panel were mostly administrative.

Because these provisions were contained in the fiscal 1984 authorization, they will not apply immediately. The House members felt that it would be better to get the program started up, even if they feel the modifications agreed to last April by HUD are insufficient.

One major concession then by the bank was to allow the full federal subsidy to be available for energy options that have a simple payback of seven years or less, as determined by the Department of Energy in its RCS program. Originaly, HUD had wanted to reduce benefits for options with paybacks of three to seven years.