Harvard will sponsor 389 units of housing for low and moderate income residents of Cambridge as the first phase of its program to aid the City in its current housing crisis.

The projects-which will be Federaly-subsidized-will probably cost about ?8 million, Administration sources said last night. No completion date has yet ?een set, but such construction generally takes around 18 months.

These 389 units-will be only for persons oat affiliated with Harvard, but another 600-700 housing units currently being planned by the University in Cambridge will include units for both Harvard and non-Harvard personnel.

Crash Planning

The housing program for Cambridge is the result of a crash planning effort which began last April, when the University's impact on local housing became a major issue in the Harvard upheaval. A program of 1100 Harvard-sponsored housing units for Boston was revealed last May.

In today's announcement of the Cambridge housing program the Corporation said that the 389 units of the first phase would be built on two Harvard-owned sites, both of which are currently vacant:

A parcel of land on the corner of Mr. Auburn St. and Putnam Ave, be devoted to a 64-unit apartment house designed exclusively for elderly residents of the City.

A site in West Cambridge near Blanchard Road will be developed for 325 units for low and moderate income families as well as for the elderly.

Federal Subsidies

The housing will be financed under the Section 236 program of the Federal government, which subsidizes such construction by paying to the developer, the difference between market interest rates and one per cent interest. "It's the only program right now that's effective in producing low-income housing," one of those who planned the project said yesterday.

If current plans hold true, about 20 to 30 per cent of the units will be placed under Federal leased housing and rent supplement programs, which subsidize rents so that a low-income tenant pays only about 20 or 25 per cent of his income for rent.

Actual development of the housing will be done by developers to whom Harvard

will rent or sell the land. The Mt. Auburn St. site will be developed by the Cambridge Corporation, a non-profit organization established by Harvard and M. I. T. to aid local low-income housing, while the West Cambridge site will go to Starrett Brothers and Eken, a private housing development company.

The architects for the Mt. Auburn Site are Don Stull and Associates.

The planning and construction of the Mt. Auburn site are to be done in consultation with the Housing Subcommittee of the Riverside Neighborhood Association, which represents residents of the neighborhood in which the site is located.

No formal neighborhood organizations exist around the West Cambridge site, which is located in a mixed residential industrial area. so local residents will probably be involved on an ad hoc basis.

Harvard officials said it has not yet been decided who will operate the completed housing projects, but said it would not be the University. They raised the possibility that at least the housing for the elderly on Mt. Auburn St. would be turned over to the Cambridge Housing Authority, which operates the City's public housing.