After months of postponing decisions on how to revamp the Federal Housing Administration-insured home loan program, housing officials have shifted into legislative overdrive.

Previously deferred discussions on whether to raise the FHA loan limit, decrease the down payment or charge more for the program have regained center stage with the release last week of a months-overdue study on the financial soundness of the FHA housing fund.

The independently conducted audit concluded that unless changes are made, the program faces some difficult times during the next 10 years in the face of slowing housing value appreciation.

The timing of the report creates some logistical problems, coming as late as it does in the legislative process. The congressional committees that recommend legislation to the full House and Senate already have approved major housing bills that do little to alter the FHA mortgage program.

One of the few remaining chances, then, to correct FHA's problems is to try to amend the housing bills when they reach the House and Senate for a vote. Both chambers are scheduled to vote on their separate housing bills in the next two weeks.

Department of Housing and Urban Development Secretary Jack Kemp has managed to shape much of the debate by releasing the Bush administration's proposals for overhauling FHA concurrently with the audit conducted by the national accounting firm Price Waterhouse.

Kemp, who fought against temporarily raising the loan limit last fall, now is willing to let it stand at the current level of $124,875. However, the matter is not necessarily settled, housing industry officials say.

Several influential housing trade groups have not given up on higher loan limits, arguing that they would bring in revenue needed to rebuild the FHA fund. Congressional members from high-housing-cost states also remain enchanted with the idea, the officials said.

The Bush administration also has rejected the idea of further reducing FHA's relatively liberal down payment requirements. Buyers purchasing homes valued at $50,000 or more must pay at least 3 percent down on the first $25,000 and 5 percent down of the remainder, while borrowers buying homes under $50,000 must put down a minimum of 3 percent.

Kemp's most controversial proposal calls for imposing a surcharge against high-risk borrowers at a rate of 0.5 percent of the loan amount a year to help raise the $1.35 billion that Price Waterhouse concluded is necessary to restore the fund to a sound financial footing. The assessment comes on top of the current upfront mortgage premium of 3.8 percent of the loan amount.

Borrowers making less than a 5 percent down payment would pay the surcharge for 15 years. The length of the assessment period drops as the size of the down payment increases, with those putting down 7 to 10 percent paying the extra fee for four years.

On an $80,000 mortgage, the extra premium would add $360 a year to the mortgage payments, said John C. Weicher, HUD assistant secretary for policy development and research.

The risk-based premium pricing would preclude 15,000 to 35,000 borrowers a year, or 2 percent to 5 percent of all current FHA loan users, from participating in the program, Weicher estimated.

Kemp also proposed to curtail the current borrower option of financing closing costs, a practice that sometimes can result in a mortgage exceeding the value of the house. Kemp wants borrowers to pay two-thirds of the closing costs in cash.

The combined Kemp proposals of adding a risk-based surcharge and limiting the financing of closing costs is drawing fire from a variety of interest groups.

Michelle Meier, legislative counsel for Consumers Union, said her organization finds the two Kemp recommendations "upsetting.

"One of the biggest benefits of FHA is the low-cash requirement, because that is one of the biggest obstacles to homeownership," Meier said. "To these borrowers, what we have now {as cash requirements} is still a lot of money. They are not going to walk away."

Two major housing trade groups, the Mortgage Bankers Association of America and the National Association of Realtors, also are threatening to take the rare step of opposing any housing bill that contains those Kemp proposals.

"We think {those two proposals} price out the very people FHA is trying to help," said Warren Lasko, the MBA's executive vice president.

Moreover, Lasko said he believes that the more affluent borrowers taking out large-balance FHA loans, may balk at the extra premium. "We think this is going to allow the conventional private {sector} mortgage insurers to cherry-pick the FHA business, depriving FHA of the income from the safer loans."

Both the Realtor and mortgage banker groups said they would like to see a return to when the FHA mortgage insurance premium was collected in smaller chunks over the life of the loan. That practice ended in 1983 with the switch to the 3.8 percent upfront premium.

Stephen Driesler, the NAR's chief lobbyist, charged that the purpose of the upfront premium collection practice is to "mask the true extent of the national deficit" rather than to achieve any redeeming social or housing purpose.

Lasko said he would like to see a compromise where only 1.35 percent of the premium is collected up front and then one-half of a percentage point is assessed all FHA borrowers "for whatever number of years are needed to make the fund sound."

Weicher, however, defended the risk-based premium structure over the pay-as-you-go scenario. "The bulk of the risk of default comes relatively early" in the life of the loan, leaving responsible borrowers to pay for the tab of defaulting borrowers.

Suzanne C. Hutchinson, executive vice president of the Mortgage Insurance Companies of America, an organization representing the private sector alternative to FHA, challenged the idea that less risky borrowers should pay the same premium, in effect a subsidy, as those more likely to default.

"The fact that the fund is losing as much money as it is shows that the cross-subsidy theory is not true. FHA needs to be run more like a private company by having risk-based premiums," she said.