Homeowners with urea formaldehyde foam insulation in their houses would get tax breaks and federal loans to help remove the government-banned material under legislation pending in the House.

The measures are attempts to provide soome relief to the homeowners, many of whom installed the insulation during the late 1970s when the government began giving income tax credits for energy conservation improvements, said aides to the bills' sponsor.

The federal Consumer Product Safety Commission in February ordered a ban, effective Aug. 10, on further sales of the foam insulation because it deemed the product a health risk. The agency had received more than 1,600 complaints blaming illnesses on formaldehyde gas emitted by the foam, and laboratory sstudies showed that high levels of the gas caused cancer in animals.

About 500,000 homes nationwide, including at least 4,000 in the Washington area, have the foam, which generally was pumped into walls where it later hardened. The CPSC estimated that removal off the insulation could cost from $6,000 to $20,000.

"The CPSC ban left wwde open the question what will happen to those with the insulation." said an aide to Rep. Silvio O. Conte (R-Mass.), sponsor of one of the relief bills.

Another bill's sponsor, Rep. Benjamin S. Rosenthal (D-N.Y.) said hearings last month on the CPSC ban showed "a need for some compensation for these people who are innocent victims....Something has to be done fot them." The hearings were held by Rosenthal's commerce, consumer and monetary affairs subcommittee of the House Government Operations Committee.

The five bills in the House--no measures have been introcuced in thhe Senate as of early this week--are:

*A measure by Rep. William S. Broomfield (R-Mich.) that would allow a refundable tax credit to cover half the cost of removing formaldehyde foam insulation. The credit would be limited to a maximum of $5,000.

*Three by Conte that would provide loans up to $10,000 per homeowner for insulation removal and loans totaling $20 million to small businesses making oor installing the product. Conte's aide said the business loans are targeted at helping firms switch into another line of business.

Conte's bill also would allow a homeowner who removes the insulaton to include the cost as a medical expense tax deduction.

*A comprehensive proposal by Rosenthal to allow a refundable tax credit of up to $10,000 for the coost of removing formaldehyde foam insulation from homes where formaldehyde gas levels are more that 0.1 parts per million or where medical evidence finds formaldehyde-related health problems.

*Rosenthal also would give a refundable tax credit of up to $5,000 for a formaldehyde-related medical cost. An aide said the provision would cover foam insulation as well as particle board, plywood and other construction materials that emit formaldehyde gas.

The bill goes on to require the government to provide homeowners with a device to measure their home's level of formaldehyde and with instructions on where to send the results for analysis. If the level exceeds 0.1 parts per million, the government would be required to conduct a full scale test of the house and to advise how to reduce the gas.

The legislation also orders the product safety commission to survey public schools nationwide for formaldehyde foam insulation and calls for a study to determine the average loss of value of manufactured homes, such as mobile homes, because of formaldehyde gas.

All three bills would let homeowners get an energy conservaiton tax credit for installing new insulation regardless of whether they previously claimed credit for buying the foam insulation.

Rosenthal set a 0.1 parts per million level in his bill because CPSC Chairman Nancy Steorts testified at his subcommittee hearing that most healthy people probably would not suffer acute toxic effects at gas leevels less than that, an aide said.

Although the coongressmen's aides were optimistic about their respective bills' chances in the House, a staffer on the House Ways and Means Committee rated the measures' tax proposals as poor.

She said she doubted that the committee would even consider the bills this year because of its busy schedule. "Anything that costs money this year pretty much goes to the end of the line," because of the huge federal budget deficit, she said.

The chances of Conte's loan proposals, which are before the House Small Business Committee, are unknown, according to the panel's aides.