Fannie Mae and Freddie Mac would have to increase their financing of low- and moderate-income home loans 19 percent by the end of 2001 under rules proposed yesterday by the Department of Housing and Urban Development, the federal agency that regulates the two government-sponsored enterprises.

District-based Fannie Mae and McLean-based Freddie Mac, which were chartered by Congress to buy home loans to make mortgage money plentiful, are the two largest mortgage-financing companies in the country.

The change, which HUD said it expects to become final by January, would require Fannie Mae and Freddie Mac to make sure that half of the mortgages they buy qualify as loans to those with low and moderate incomes--up from the current requirement of 42 percent.

Low- and moderate-income loans are defined as those to families with incomes at or below a region's median income. The national average for median incomes is $47,800.

HUD Secretary Andrew M. Cuomo said the changes would add $488.3 billion in mortgages for an estimated 7 million low- and moderate-income families over the next 10 years.

Both Fannie Mae and Freddie Mac exceeded the 42 percent target last year, Fannie Mae by 2 percentage points, Freddie Mac by nearly 1 percentage point.

Fannie Mae has opposed raising the requirement from 42 percent, saying that level was a reasonable target for the company to meet. But yesterday Fannie Mae Chairman Franklin Raines stood next to Cuomo in support of the new target, though he said it would "be a stretch" for the firm to reach it.

Freddie Mac has withheld support of the new proposal because it argues it would put it at a disadvantage to Fannie Mae.

The current formula for calculating the 42 percent target allows both new single- and multifamily-home mortgages to count as low- and moderate-income loans. It also allows the refinancing of existing multifamily mortgages to count toward the 42 percent goal.

Freddie Mac argues that because Fannie Mae has a much bigger portfolio of multifamily loans already, Fannie Mae would have an unfair advantage in meeting the higher 50 percent target if the formula remains the same.

Fannie Mae's stock closed yesterday at $70.62 1/2, up $1, while Freddie Mac closed at $59.75, up 43 3/4 cents.