Federal National Mortgage Association yesterday reported a loss of $21.6 million for the first quarter compared with profits of $24.2 million (40 cents a share) for the 1980 first quarter.

The association said the loss was primarily due to record borrowing costs, which resulted in a first-quarter loss of $49.2 million on FNMA's mortgage and loan portfolio compared with a profit of $25 million for the same quarter in 1980 and a loss of $11.7 million for the fourth quarter of 1980.

Mortgage purchases at FNMA also dropped dramatically from $3.3 billion a year ago to $432 million for the latest quarter.

"The results of the first quarter reflect the degree to which FNMA is adversely affected by borrowing costs that increase at a faster rate than the yield on its mortgage portfolio," FNMA Chairman Oakley Hunter said.

"During the quarter, FNMA initiated a nationwide program to improve its portfolio yield by encouraging home owners and buyers to refinance existing FNMA mortgages. The success of this effort, and lower interest rate levels in the money and credit markets, are important keys to improved earnings," Hunter said.

In another report, Citizens Bank & Trust Co. said it recorded a first-quarter profit of $2.54 million ($1.66 a share) compared with $1.96 million ($1.28) a year ago.

The bank also reported assets increased to $672.68 million at the close of the quarter from $646.38 million at the end of March 1980. Time deposits rose to $327.11 million from $300.32 million.