WASHINGTON - As Congress winds up its 1993 session this week, housing legislators are making a last frantic push to pass legislation to eliminate legal obstacles that are keeping HUD from selling off nonperforming multifamily housing loans.

Even though the Senate took a giant step forward on Friday by passing the measure, housing lobbyists who have been closely monitoring its progress predicted time would run out before Congress can take final action on the bill.

"The clock is ticking," said one housing lobbyist. "If we had a few more days, the chance would be greatly increased" for the bill to be approved.

The bill would be significant for the municipal market because last week a top HUD official said the agency wants state and local governments to buy some of the loans. State and local housing officials have said they expect that tax-exempt multifamily bonds or 501(c)(3) bonds would be issued to rehabilitate the deteriorated apartments that were built with the loans.

The nonperforming loans the government is trying to sell were insured by the Department of Housing and Urban Development and were assigned to the agency by lenders when borrowers defaulted.

HUD has been unable to sell the loans because of a 1987 law that requires the department to offer subsidies to buyers of the loans under Section 8 of the housing code to ensure that the properties are preserved for low-income tenants. Although it legislated the requirement, Congress never appropriated the needed Section 8 funds.

The bill passed Friday by the Senate would ease the subsidy requirement by permitting HUD to use other methods to make sure the projects remain low-income.

The House, however, has so far failed to draft a similar bill. Lobbyists have been at a loss to explain why the House's top housing lawmaker, Rep. Henry Gonzalez, D-Tex., has not done so. They suggest that Gonzalez, the chairman of the House Banking Committee and that panel's housing subcommittee, has been distracted by other issues.

Another problem is that Gonzalez appears reluctant to go as far as the Senate has proposed in easing the subsidy requirement, the lobbyists said. Gonzalez's top housing aide could not be reached for comment.

Although there is not enough time to convene the House banking panel, congressional aides have told lobbyists that there still is a chance for the legislation to be given final approval by Congress before it adjourns this week.

Staff members to the House and Senate housing panels met over the weekend to try to agree on a bill that would not go as far as the Senate version but still give HUD enough flexibility to begin the loan sales.

If the aides agree, a narrower version could be drafted as an amendment that the House could attach to the Senate bill. The measure would then have to be sent back to the Senate for final approval.

Even using the streamlined process, chances for final passage of a bill before adjournment are "no better than 50-50," said one housing proponent who is monitoring the negotiations. "There's not enough time."

The Senate bill also contains a number of other housing provisions, including one that would provide more federal money to state and local governments under the HOME program for the construction of multifamily units.

The provision would end the HOME program's bias toward the rehabilitation of existing housing units and rental assistance. Under current law, states and localities must contribute $1 for every $3 of federal funds received for new construction. But they are required to contribute only $1 for every $4 of federal funds received for rehabilitation or rental assistance.

The Senate bill would bring the matching requirement for new construction in line with the other two categories. Lobbyists said if a final bill emerges from the staff negotiations, it probably would not contain the HOME provision or others unrelated to the sale of HUD loans.

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