President Reagan yesterday signed emergency legislation to allow the Federal Housing Administration to provide billions of dollars of credit insurance for home buyers.

The legislation, which was approved by Congress and flown to Tokyo for President Reagan to sign, increases the credit limit on FHA mortgage insurance by $17 billion and extends its operating authority through June 6. The president is in Tokyo to attend the economic summit.

The FHA closed its doors Tuesday after reaching its loan credit limit of $57.4 billion. It told lenders to stop taking applications for mortgages insured by the agency. The FHA's authority to guarantee loans expired Tuesday night and, since then, its business of helping many first-time and moderate-income home buyers came to a halt.

An FHA spokesman said the agency will start processing applications again on Monday and that there was "not enough of a lapse to cause problems or anything."

FHA loans are popular because they offer mortgages requiring only a 5 percent down payment, and lenders are more willing to make these loans because they are guaranteed by the government. FHA loans constitute about 15 percent of all mortgages in the United States.

The legislation also gives new life to the Government National Mortgage Association -- better known as Ginnie Mae -- which guarantees payment on mortgages insured by the FHA and Veterans Administration and bundles them into mortgage-backed securities. These securities then are bought and sold by investors.

Ginnie Mae reached its credit limit of $65.3 billion three weeks ago and had to stop issuing guarantees on mortgage-backed securities. The legislation signed by Reagan would increase Ginnie Mae's limit by $60.68 billion, which should take the agency through the end of the fiscal year.

The FHA's loss of authority came at a time when home-buying activity is at record levels. In March, sales of new homes registered the sharpest monthly increase since 1963, pushed by the lowest mortgage interest rates in eight years.