With the flow of funds into savings and loan associations declinin and interest rates increasing, the entry of asset-rich federal credit unions into the mortgage market may have a noticeable impact. Credit unions legally may begin mortgage lending May 8, but few if any will actually be making loans before the end of the year.

Of the 24 federal credit unions in the Washington metropolitan area, 84 have assets of $2 million or more, the minimum required by the National Credit Union Administration, the government regulatory body. The assets of these credit unions total $1.96 billion. NCUA will permit a maximum of 25 percent of assets to be invested in mortgages.

An NCUA economist has worked out a model of hypothetical credit union activity here over the next five years. Assume 20 percent annual increase in assets and assume all 84 credit unions invest the maximum 25 percent. The value of their investment in real estate would reach $1.24 billion. If all invested only 5 percent, the total would amount to $249 million.

Consider the marketing studies of the State Department Federal Credit Union with $89 million in assets and only $39 million in loans outstanding. In a recent survey of 3300 members, 54 percent said they approved of financing a home through State Federal. And 429, or 13 percent, said they planned to purchase a home within a year.

If each of the 429 borrowed $40,000, the total would come up to $17 million. About half of State Federal's members live in the Washington area. Since more than half of those who said they planned to buy within the year live in this area, the total in this region could amount to maybe $10 million.

State Federal hopes to begin operations as soon as major problems are solved. One involves NCUA's limit on the sale price of homes to 150 percent of the median sales price in the area. Because State Federal's members are affluent as a group they tend to buy the more expensive residences. Yet if NCUA interprets the median as that of the entire Metropolitan Washington area, as opposed to, say, Fairfax County for anyone buying a house there, houses over $100,000 would be effectively ruled out.

There are some 1.3 million members and $2.1 billion in assets in metropolitan credit unions. These figures are disproportionately high because two of the largest groups, teh Navy and Pentagon credit unions, count members all over the world and their assets alone make up 40 to 45 percent of the $2.1 billion.

Navy Federal, the largest credit union of all with nearly 450,000 members and $683 million in assets, intends to begin making mortgage loans on an experimental basis next fall in a metropolitan area.

Navy's resources, according to executive staff director Joe Pavela, will allow it to warehouse loans for as long as three months if necessary to put together the minimum package that can be resold to an organization like Fannie Mae, for example.

Navy Federal will charge market interest rates, but Pavela expects that closing costs can be cut 20 percent or more through group settlements based on volume. The credit union's marketing survey showed many would be interested in applying for its mortgage loans.

Along with Navy Federal, the Department of Housing and Urban Development's Federal Credit Credit Union also has received FHA approval. Lacking Navy or State's large resources, the HUD organzation with $6.5 million in assets from its 5,500 members is one of a group of nine credit unions studying a joint vneture: a mortgage corporations with a staff of experts who can oversee the credit unions' lending practices and package loans for resale. However, a proposed NCUA regulation barring origination fees might make the start up costs of a local coporation prohibitive.

Even if this local efforts fails, they will likely be able to deal through a centralized mortgage banking operation now being organized by th Credit Union National Association, a trade group. A bill to establish a central liwuidity fund has also been introduced in Congress.

The key to the expansion of federal credit unions into long term mortgage lending is the ability to sell paper on the secondary market. If federal credit unions are to get into the big leagues by selling loans to private banks and quasi-government organizations like Fannie Mae, their loans must be top quality.

To offset thisM flexibility has been maintained in the regulations so that credit unions will still be able to male substandard loans provided they keep them in their portfolios and within 25 percent of their assets.