Federal husing credit programs would be cut sharply in the budget President Reagan proposed this week, reflecting the administration's conservative philosophy that the federal government should not compete with private credit markets.

Stricter limits on the amount of direct loans and loan guarantees would be put on the various housing agencies, including the Federal Housing Administration, the Government National Mortgage Association (Ginnie Mae), and the Farmers Home Administration (FmHA).

The new National Consumer Cooperative Bank, which the budgeters called "desirable but unnecessary," would be abolished entirely. So would the Department of Housing and Urban development's Indian housing program, which the administration said has a large backlog of funded housing already.

"In the last decade, rapid growth of federal credit activity -- both direct loans and loan guarantees -- has had serious effects on the nation's economy and on financial markets," a budget document noted. "For this reason, rigorous control over federal credit programs, including loans financed off budget, is an important part of the president's budget reform plan."

The housing credit trims immediately drew criticism from housing and financing sources.

Direct housingl aid, such as rent assistance and low-income housing subsidies and construction, also were trimmed from former president Carter's January budget.

The new budget request allows for 175,000 additional HUD-subsidized housing units for fiscal 1982 over fiscal 1981, a cut from 260,000 added units proposed by Carter for fiscal 1982. The administration also wants to use more existing housing and slow down construction and renovation. One-quarter of the funds were slashed from the January request for construction and renovation in the public housing modernization program, bringing the new figure to $1.5 billion.

The largest credit aid reduction would be in the FHA's mortgage insurance program. Reagan wants to limit the level of insured home mortgages in fiscal 1982 to $35.4 billion -- a cut of $9 billion from Carter's budget proposal. The administration also want to phase in an increase in the rent contribution of tenants in FHA-owned housing from 25 to 30 percent of the renter's income.

Ginnie Mae buys FHA and Veterans Administration mortgages and resells them as mortgage-backed securities, absorbing higher interest costs, as a way of generating new mortgage money. Carter had wanted to raise the amount of mortgages Ginnie Mae could handle from the fiscal 1981 level of $53 billion to $72 billion, but Reagan has proposed keeping the amount at $64 billion for fiscal 1982.

One of the administration's budget documents explains that the reductions in FHA and Ginnie Mae loan guarantee commitments is part of an "effort to reduce subsidies to middle- and upper-income families."

A Ginnie Mae tandem mortgage purchase program, which subsidizes mortgage financing for HUD subsidized housing and other rental apartment projects, is to be discontinued after 1982. The administration said will not propose any alternative mortgage subsidy program, such as a grant program, to replace the current tandem mortgage purchase program.

The national Consumer Cooperative Bank, which only really got going this year, provides credit to both housing and retail cooperatives. In proposing an end to the bank, the administration called this one of the federal government's "desirable but unnecessary programs" which must be eliminated to save money.

"Cooperatives already enjoy special tax treatment," a budget document pointed out. "Successful cooperatives can obtain adequate private credit, and the use of scarce budgetry resources to subsidize inefficient cooperatives cannot be justified."

The rural housing insurance fund at the FmHA would be trimmed by $517 million in fiscal 1982. The administration says that the cut "will not significantly affect the poorest households and communities."

"FmHA would narrow its focus to serve borrowers who lack access to other credit sources, rather than serve as a source of below-market-interest-rate loans to a wide variety of private, creditworthy borrowers," it argues. "Under this approach, housing programs serving the very poor would receive smaller reductions than those that provide home ownership loans to moderate-income families."

In proposing to scrap HUD's Indian housing program, the administration says there are now 22,000 funded but unfinished Indian Housing units, enough to fill a 5 1/2-year supply at the 4,00-unit program level proposed in Carter's January budget: "With an average budget authority cost of over $175,000 per unit, there is no reason to continue this very expensive and substantially backlogged program."

Speaking for the Mortgage Bankers Association, whose members supply most of the funds for FHA-insured mortgages, executive vice president Mark J. Reidy contended that the proposed Reagan ceiling of $35 billion for the next four fiscal years would "set artificial credit limits" and

Well aware that the demand for housing credit has lessened in the past 18 months, Reidy said that expected upturn in home purchases can be expected if mortgage rates moderate within the next 18 months. "If the demand for mortgage money returns, the potential buyers are there and the market must be able to react quickly," he added.

If the $35 billion ceiling on FHA-insured home loans is adopted, additional credit could not be allocated without congressional action.

Michael Sumichrast, chief economist and frequent spokesman for the National Association of Home Builders, agreed with Reidy that the Mortgage credit ceiling is not currently an issue because of the decreased level of home buying. He also mentioned that the cutback on the potential use of FHA mortgages might signal an effort to put the insurance of mortgages into private hands.

In recent years many conventional (non-government-backed) home loans and other lending institutions. Private insurers only guarantee the top part of a home loan -- assuming the intrinsic value of a house would be good for the basic 80 or 90 percent of the loan amount in relation to total value.

Recently, private insurers have become more aggressive and have contended that they have the capability to insure mortgages for less than FHA, which charges one-half of 1 percent of the loan amount on a declining basis. Private mortgage insurres also have faced a decline in their business because of the lower level of; home purchases with privately financed mortgages.

Traditionally, most mortgages financing sources agree that FHA-insured loans constitue a valuable alternative to conventional home financing, especially in times of housing downturns when conventional credit sources dry up or become too expensive. FHA down payment requirements also are considerably lower, particularly in times of a credit crunch.

FHA also tends to cater to the lower end of the home purchasing market because it has a $67,500 mortgage ceiling that is adjusted up to the $90,000 range in high cost areas such as Washington.

At a press conference following the Reagan budget announcemnt, new Housing and Urban Development Secretary Samuel R. Pierce said that the FHA home loan program for non-subsidized buyers has proved its value to many moderate-income Americans.

The basic 203 (b) FHA home mortgage, which dates back to 1934, pioneered in the use of long-term, fixed-rate financing and the standard monthly amortization payment to cover principal and interest. The FHA mortgage rate is now 14 percent, having been increased earlier this week. However, conventioanl mortgage rates now are in a range above 14 1/2 percent in most parts of the nation.

Conventional lenders, especially S&Ls, are making mostly adjustable rate mortgages these days -- making the borrower face the possibility that the basic lending rate might be adjusted upward if the level of mortgage rate moves up during the course of the loan. The adjustable rate also provides an assurance of a lower rate if the market rate declines.

Mortgage financing experts now see the FHA and VA loans as the main opportunities for long-term, fixed-rate mortgages. However, there also has been speculation that the FHA long terms might be extended to 40 years while also adopting an adjustable-rate concept.