"There is no guarantee we will be able to solve this, but there seems to be more flexibility now than there was a year ago," Schwartz said in an interview.
The program, funded with federal, state and local dollars, has provided grants of up to $50,000 to relocate the owners of Logan properties, which are sinking because of improper construction atop unstable fill, mostly ash and cinders.
The size of each grant depends on what the assessed value of the Logan property would be if it were structurally sound, and the cost of the new property the residents want.
The federal government has already contributed $3 million to the program, and just last week Congress approved another $3 million.
But Washington wants the city to provide $3 million in matching funds. And when City Council was carving up the budget last week, the city's $3 million was deleted.
"I was told directly by (Finance Director) Betsy Reveal and (Mayor Goode's special adviser) Ernest Barefield that they felt they could use community development money or some other funds to cover that matching allocation, and it shouldn't be a problem," said Council Appropriations Committee Chairman John Street, who drafted the budget settlement.
But Schwartz and spokesmen for U.S. Reps. Thomas Foglietta and Lawrence Coughlin said the problem may not be solved so easily.
Schwartz said he would try to persuade federal authorities to let the city borrow against future federal grants for community development to come up with the city's matching dollars.
"I'll ask them to take into account the serious financial situation now faced by the city," Schwartz said.
"We're not sure what HUD's going to say," said Michael DeBerardinis, who runs Foglietta's Philadelphia office. "They've been pretty strong up to this point, insisting on the match and insisting it not be reworked federal money. But we're supporting it, we're pushing it. We're trying to fight to get the money to the city any way we can."
One key to the city's success may be Coughlin, a Republican whose district is largely in Montgomery County, but includes Roxborough and portions of Chestnut Hill and Overbrook.
When Congress imposed the matching-funds requirement last year, "Mr. Coughlin thought it was imperative that the city should be putting up matching
funds, that we shouldn't be bailing out the city 100 percent," said Peter Holran, Coughlin's press aide. "I don't know if his thinking on this has changed."
William Miller, executive director of the non-profit Logan Assistance Corp., said the agency has provided grants to 166 households so far and has enough money left to operate through the end of 1990, pushing the total of relocated households to near 200.
But that number represents less than half the 457 homes targeted for priority assistance, Miller said, and by some estimates as many as 950 households may eventually need help.
"I certainly hope they find a way so that this federal money doesn't get lost," said Philip Ackerman, president of the Logan Business Association. ''It would be a crying shame if it is."
"I don't know anything firsthand, but I do know the governmental administrations are playing havoc with a lot of people's lives," said Dolores Shine, president of the Ad Hoc Committee for Logan, a citizens' group.
"The $3 million is a drop in the bucket compared to what we really need in Logan," said City Councilwoman Marian Tasco, whose district includes the sinking homes. "We can't afford to lose one dollar."
Another city relocation program involves seven sinking homes in Roxborough. But the Roxborough effort is already budgeted for the $550,000 it needs and will not be affected by the matching-funds problem, according to Rebecca Northrop, director of policy and planning for the city housing office.