Federal Reserve Board Chairman Paul A. Volcker has dealt a potentially severe blow to the main Senate initiative to help the housing industry--federal subsidies of mortgage rates for new-home purchases--by concluding that it would not reduce unemployment and could have adverse effects on other industries.

The White House still is trying to decide whether to endorse the mortgage rate subsidy and has called on supporters to back up their claims that the plan would create 700,000 jobs, the strongest selling point to the administration.

In fact, the primary sponsor of the idea, Chairman Richard Lugar (R-Ind.) of the Senate housing subcommittee, has billed the $1-billion-a-year legislation as a jobs stimulus program rather than a housing aid bill. A Cabinet-level task force studying the plan has called in economists from the National Association of Home Builders and other housing groups to give their assessment of the jobs impact.

Under the plan, being pushed by the homebuilders, low- and moderate-income homebuyers could get mortgages at interest rates 4 percentage points lower than the FHA rate, now 15 1/2 percent, for five years. The federal government would pick up the tab for the rate subsidy initially, but the homebuyer would pay it back when the home was sold or refinanced.

So long as huge federal deficits continue, "New federal programs to channel credit and economic activity to any one sector will add to financial market pressures and choke off activity elsewhere," Volcker said in a letter to Sen. William Proxmire (D-Wis.), who had asked for the Fed chairman's opinion.

" . . . jobs generated by the new program are likely to come at the expense of jobs lost in other, nonsubsidized parts of the economy," Volcker said.

Proxmire had asked Volcker if the Fed planned to loosen its money supply policies to accommodate the proposal and, if not, what would happen when the credit demand created by the program had to compete with other credit needs.

Volcker answered, in effect, that the Fed would not open up credit to deal with demands created by the Lugar plan, and Proxmire concluded that the Fed's stance would doom the prospects for an overall economic stimulus from the proposal.