Officials at the U.S. Department of Housing and Urban Development announced a partial retreat Wednesday from a budget-cutting plan that officials in New York and other large cities said would have drastically cut the amount of federal rental help available to poor families.

The plan reduces the amount of money given to cities to pay for rental-assistance certificates, which families turn over to private landlords as a government guarantee that the monthly rent will be covered. Under pressure from the White House's Office of Management and Budget to cut costs, HUD began the reduction last fall primarily because some cities and rural areas were not using all the money available for the certificates.But in many larger cities, where demand for housing assistance is acute, officials had long followed a HUD policy called overleasing, wringing out savings to pay for more certificates each year than the program intended. The budget change would end that practice, forcing those cities to eliminate thousands of certificates through attrition - as many as 13,000 of 77,000, for example, provided by the New York Housing Authority.

The change would not have taken away rent help from those already receiving it, but it would have forced thousands of needy applicants, who have already waited as long as eight years, to wait several more years.

To address the problem, HUD plans to "grandfather" in the larger housing authorities, essentially allowing them to maintain the level of subsidies they now provide, but preventing them from stretching the program any further by overleasing, said Karen Hinton, a HUD spokeswoman.

"To not do that would clearly impact the waiting list," Hinton said, "and we're seeking to provide more housing, not lessen it." She added that Andrew Cuomo, the HUD secretary, "fully appreciates the great need for housing assistance."

New York City housing officials applauded the decision Wednesday. "We're delighted and relieved," said Ruben Franco, chairman of the New York City Housing Authority.

HUD made the policy change last fall but did not formally announce it until recently with a notification placed on the agency's Web site. An article about it appeared Wednesday in The New York Times.

In the weeks since the notice appeared on the Web site, officials from housing authorities across the United States have complained that HUD was trying to sneak the change past them. Some said HUD was making a subtle attempt to trim the Section 8 program, long the flagship of the nation's affordable-housing strategy.

The program, created during the Nixon administration, houses about twice as many families as conventional public housing, with preference given to the poorest families. Eligibility is based on family income, which is usually less than $30,000 for a family of four.

In New York, the program will provide up to $475 to help a family rent a one-bedroom apartment or up to $1,000 for six bed-rooms.