Construction of more than 150 luxury town houses is expected to start next summer at the once-financially troubled Hillandale development on Reservoir Road in Georgetown.

The D.C. Zoning Commission recently cleared the path for the long-delayed construction at the project, which a year ago was at the center of a highly publicized bankruptcy filing.

The 42-acre development is on the site of what is known as the Archbold estate, one of the District's oldest and, at one time, most elegant mansions, formerly owned by some of the heirs to the Standard Oil fortune.

Attempts by Hillandale Development Corp. to develop the site faltered almost two years ago, after only 55 town houses were built. Hillandale Development was part of the once-healthy financial empire of Texan C. W. (Clint) Murchison, former co-owner of the Dallas Cowboys football team.

First Savings Bank of Arkansas, which held a $25 million first trust on the project, paid $14.5 million for it at a bankruptcy auction in mid-January. That figure was far less than the bankruptcy court had estimated the property was worth.

In May, the Arkansas bank and Kettler Bros., a major suburban Washington development company, reached an agreement that Kettler would develop the remaining town-house units.

Michael Marrs, manager of the Hillandale project for Kettler, said this week that his company plans to begin preparing the land for con- struction in February. Models should be finished by September or October, he said. The homes are expected to cost about $350,000 apiece.

M. R. Godwin, president of the Arkansas bank, was jubilant about approval of site-plan changes that will allow the project to proceed.

"Kettler Bros. has done a lot of preliminary work. We are obviously pleased," Godwin said.

"We First Savings Bank will provide construction financing on a revolving basis for the town houses. We will invest another $45 million before the project is finished," he said.

That commitment will boost the Arkansas lender's financial involvement in the project to more than $65 million. In addition to the town houses, the project calls for construction of 26 more detached homes. Only one detached house has been built so far.

"We were waiting to get the zoning approved so that we could be sure what we would be telling prospective buyers was accurate," Godwin said. The 26 lots will now be sold, Godwin said. However, a spokesman for Kettler Bros. said his company might be interested in building some of the detached homes.

Kettler Bros. currently is finishing its Westover Square town-house project near Ward Circle and Massachusetts Avenue NW, where units sold for $250,000 to $300,000.

Ironically, those units were competition for the first town houses built at Hillandale, where purchasers paid between $298,000 and $450,000 for their homes.

Kettler Bros., the Arkansas bank and members of the Hillandale homeowners association, representing about 50 of the units built by the original developer, reached agreements on maintenance that led to the bank's and residents' support for the new development plans, according to J. Kirkwood White, a lawyer representing Kettler Bros. The lawyer said residents of adjacent neighborhoods backed his client's proposal because stands of trees and buffers along 39th Street NW that were part of the original plan were preserved by the new developers.

Changes approved by the zoning commission primarily involve design and construction methods, rather than a rezoning. The original units were built on top of a shared garage, a style seen often in high-density apartment buildings but rarely in town houses.

Kettler will build individual garages attached to the town houses, Marrs said. The town houses will include vaulted ceilings and large master-bedroom suites, he said.

Marrs said he is confident that the real estate market will remain strong next year and that the units will sell. He said Kettler learned at the Westover project that units in the high price range may be less affected by economic changes than are lower-priced units.

Kettler Bros. has built more than 14,000 homes in 75 communities in the Washington area since the company was founded in 1952.

Given the financial troubles that have plagued Hillandale, Marrs said he wants to "focus on the future."

A continuing problem for developers and lenders at the project is what to do with the old Archbold mansion. It was once the setting for some of Washington's most elegant social events.

"First Savings Bank has been trying to sell the mansion," Marrs said. But so far, no buyer has come forth.

"We are looking after it, but it is deteriorating. It needs to be purchased and refurbished," Marrs said.

Existing zoning restrictions limit the use of the house to either a single-family residence or a social gathering place for Hillandale residents. Those restrictions have prevented organizations and other interested parties from buying the mansion, according to developers.