A new congressional study suggests that America's homeowners will have a huge, multibillion-dollar loophole to avoid one of the toughest federal tax reforms being considered by the Senate and House.

The study, conducted by the General Accounting Office, confirms the worst fears of Capitol Hill tax reformers: Beginning in l987, home equity could turn into a critical ingredient for sheltering income from federal tax collectors. More than 26 million households -- with $700 billion worth of spare home equity to tap -- could have greater incentives to use their homes to avoid taxes, according to data assembled for the study.

That, in turn, would cost the Treasury significant revenue and benefit upper-income homeowning families at the expense of lower- and moderate-income renters, congressional tax-reform advocates charge.

The GAO study focused on one of the political-bombshell issues of tax reform. In both the House-passed tax bill and in pending Senate proposals, the ability of American taxpayers to write off interest on borrowings for most "nonbusiness" purposes is severely restricted. Unlike the present system, taxpayers won't be able to deduct interest payments for credit-card debts and borrowings for kids' educations, health bills, auto loans, vacations, limited-partnership investments and other forms of interest write-offs without limit.

Under the House-passed reform bill, for instance, taxpayers would be limited to writing off no more than 0,000 ($20,000 on joint returns) a year beyond their "net investment income" and their home mortgage interest. According to the GAO study, if the Senate accepts a similar formula, the federal tax system will be open to a new form of mass "financial manipulation": home-equity shelters.

"The data we gathered indicate that . . . the potential exists for the average homeowner to avoid the new tax-revision limitation" and to fully write off the very consumer-interest items that Congress is seeking to restrict, the study said.

By allowing first- and second-home mortgage-interest deductions with no limit whatsoever, Congress is offering a vast loophole to homeowners to refinance their home-equity holdings into mortgage debt, the GAO warned. By refinancing to the hilt, homeowners will be able to borrow money with tax-deductible interest to pay for newly-nondeductible consumer items. Under tax reform currently moving through Congress, taxpayers' mortgage interest deductions are likely to pay for "purchases of consumer items such as a car, vacations, college educations or investment property," the study said.

How great is the potential for this to occur? According to GAO estimates, the potential is exceptionally large:American homeowners' net equity in their principal residences, the market value of the property beyond its mortgage debt, is $2.1 trillion. Three-quarters of the 35 million American taxpayers who itemize deductions claim home mortgage interest write-offs. In other words, roughly 26 million home-owning families already claim mortgage-interest deductions. Upwards of $700 billion worth of net home equity likely would be available for post-tax-reform homeowners to shelter additional deductions of interest.

Lending institutions' growing willingness to allow homeowners to tap their equity is likely to magnify use of this technique in the wake of tax reform, according to Capitol Hill tax experts who reviewed the study. The GAO noted that one lender recently "advertised that, by pledging a residence as security, a homeowner could borrow $250,000 or more with no application fee or prepayment penalty." The lender promised that "you can use the money any way you like -- for home remodeling, vacations, college tuition, investments or any worthwhile purpose."

Personal line-of-credit home equity transactions -- already a big business for banks -- "will turn into an instant, private-sector tax-shelter program for homeowners," one congressional tax committee staff member predicted. Even with lower tax rates, "Anyone with home equity, kids going to college, car payments and some home-improvement expenses is going to look to his real estate for deductions like never before," the committee expert said.

Is Congress likely to back away from its tax-revision plans in the wake of the General Accounting Office's projections? Not a chance in an election year, tax professionals on Capitol Hill agreed.

"Whether I approve of it as social policy or not, I wouldn't be caught dead renting after tax reform," one tax-bill draftsman said. "The incentives will be overwhelmingly on the homeownership side of the housing equation, even more so than now."