The Reagan administration, reiterating its policy against increased government assistance for housing, yesterday opposed legislation to expand the federally supported secondary mortgage market.

The administration called instead for more private-sector action.

Lawrence A. Kudlow, chief economist of the Office of Management and Budget, told a House banking subcommittee yesterday that the experience of the past three years shows that government stimulus does not work.

Despite $320 billion in direct loans, loan guarantees and loans by government-sponsored agencies since fiscal 1979, the housing industry continues in a slump, he noted. Housing starts have sunk to 950,000 annually from 2.2 million in mid-1978.

Rather than helping this dire situation, the 600 percent expansion over the next several years proposed by the Federal Home Loan Mortgage Corp. could be expected to "worsen the very area it seeks to help," Kudlow observed. "Heavy borrowing requirements will exert upward interest-rate pressures and will reduce the probability of a housing recovery."

The FHLMC, known familiarly as Freddie Mac, is an arm of the Federal Home Loan Bank Board. It buys mortgages from lenders and issues mortgage-backed securities that are sold to investors to free more funds for lending.

(This week, in the largest transaction to date, the agency bought $620 million of home mortgages from Home Savings of America in California and issued mortgage participation certificates in the same amount. The certificates will be sold to investors. The swap allowed Home to get rid of low-yielding mortgages it acquired when it merged with nine ailing savings and loans last fall. Since October, Freddie Mac has exchanged about $15 billion in mortgages for certificates.)

Freddie Mac aims to help the moribund housing industry by pumping $30 billion to $40 billion a year into housing. To do this, the agency has asked Congress to give it quasi-independence so it can go directly into the credit markets. It needs $1.2 billion in external capital over the next five years. At the same time, Freddie Mac would maintain specific links to the federal government, including a $200 million line of credit at the Federal Home Loan Bank.

Kudlow contended yesterday that "there is in fact no such animal as a quasigovernment agency." Investors would perceive the new Freddie Mac as still an agency, backed by government guarantees.

As such, Freddie Mac could borrow at lower rates in the credit markets, thereby "crowding out" its private counterparts and pushing up interest rates for all. This, Kudlow said, is clearly at odds with the direction of administration policy.

The administration would prefer that Freddie Mac sever all links with the federal government within a specified time and become a truly private corporation. David O. Maxwell, chairman of the Federal National Mortgage Association (Fannie Mae), also testified against the bill. If enacted, it would give profitable Freddie Mac certain advantages over its unprofitable rival, Fannie Mae, he said.

Proponents of the legislation include much of the housing industry.