After a year of looking for homeless families to live in 26 empty houses in the District, city officials have found occupants for only 12 and now plan to give back the other 14 homes to the federal government, the D.C. government said this week.

The houses, which were taken over by the Department of Housing and Urban Development after the owners defaulted on federally insured mortgages, were leased by the District from HUD last January. The District is paying HUD $1 a month per house for the properties, a department spokesman said.

Although there are about 300 homeless families in the District, few have enough income to quality for the program, known as Family Uplift, said Ken Long, special assistant to the D.C. commissioner on social services.

To qualify for the house program, a family must have at least one member who is working and enough income to pay monthly utility bills. The family also must deposit about 30 percent of its income into an escrow account each month, he said.

Ideally, families will be able to save enough money in their escrow accounts to buy a home of their own eventually, said Barbara Burke Tatum, the social services commissioner.

"We see this as another step up" for working families who need help, Tatum said. The program was not designed as an "entitlement," or government-assistance program, because "there's too much entitlement going on now," she said.

Families already are living in six of the houses leased last January, while another six houses are being rehabilitated for the new residents by members of local church congregations, Long said. He said housing officials have had trouble finding families who have enough income to meet the Family Uplift requirements.

The D.C. Department of Social Services signed one-year leases on the houses last Jan. 12, with clauses providing for two successive one-year renewals, Long said. He said his department now has decided to give 14 of the houses back to HUD because in most cases the structures "will cost a lot more to rehab than we want to put in." One is a five-bedroom house, too large for any homeless families eligible for the program, he said.

Chris Leonard of the Association of Community Organizations for Reform Now (ACORN), a nonprofit housing group that is sponsoring a squatters' campaign in the District aimed at forcing HUD and the city to turn over all their empty houses to homeless people, said the Family Uplift "program is obviously a failure."

ACORN members broke into an empty, HUD-owned house in Northeast Washington's Trinidad neighborhood last month, and helped Hazel Adams, her husband, Bamboshi Shango, and their two children move in.

The house turned out to be one of the 26 leased to the District for the Family Uplift program, Leonard said.

About two dozen representatives of ACORN and other groups advocating more help for homeless District residents held a rally outside the District Building last week and went inside to demand a meeting with Mayor Marion Barry.

They saw a Barry deputy, instead, and urged that the Family Uplift program be killed and that the District buy all the empty, HUD-owned houses in the District, according to Leonard.

I. Toni Thomas, head of HUD's Washington field office, said in a recent interview that she discussed the Family Uplift plans extensively with District officials.

"One major concern was making sure they had families with incomes who could live there," she said.

In general, Thomas said, "I would like to see more people in the community be able to acquire" HUD's foreclosed properties, including nonprofit organizations that would help homeless and low-income families move into them.

These groups get 10 days advance notice before HUD opens up bidding to the public, and must make a down payment of 3 percent of the sales price if they decide to buy a house. HUD has the authority to reduce the price by 10 percent of a home's appraised value, she said.

"If a nonprofit {group} came to me with a good proposal I would surely entertain it," Thomas said.

But if nonprofit groups do not buy the houses, HUD asks for sealed bids from other prospective buyers. The sealed bid method of selling is "department policy," Thomas said.

Of the 271 District houses in HUD's inventory now, 67 are for sale.

Another 119 are under contract but the sales have not been completed. The remaining houses are not on the market for a variety of reasons. These include the 26 that have been leased to the District government for the Family Uplift program. Several others are being used to test methods of removing lead-based paint.