In the recent struggle to knock nearly $500 billion off the budget deficit over the next five years, Congress squeezed about $4.6 billion of the tab out of the housing arena.

The sacrifices came at the expense of a mortgage program earmarked for veterans and the tax incentive for high-income taxpayers to own a home or buy a larger one.

Until the final hours of the four-month debate, budget negotiators had their sights on two more housing programs that could have produced another $2.1 billion in savings. Ultimately, though, Congress spared the politically popular mortgage revenue bond program and the low-income housing tax credit.

As the dust from the acrimonious debate clears, one thing that remains to be seen is whether the economy delivers on the promise of lower interest rates, including those for mortgages, because of a lower federal deficit.

Lyle E. Gramley, chief economist for the Mortgage Bankers Association of America, said he believes mortgage interest rates would have risen sharply if the budget talks had fallen apart.

"A recognition that the United States government was unable to come to grips with its fiscal problems would have been taken extremely seriously in the financial markets both here and abroad," Gramley said.

Adjustable-rate mortgages did benefit from a quarter-percentage point drop in short-term rates one business day after passage of the budget accord, said John Tuccillo, chief economist for the National Association of Realtors.

The decline widened the spread between adjustable-rate mortgages and 30-year, fixed-rate mortgages to about two percentage points, a gap wide enough to "tip" more borrowers in the direction of adjustable mortgages, he said.

"Housing sales, to the extent they are being sustained, are being sustained by the affordability of adjustable-rate mortgages," Tuccillo said.

As pressure from federal borrowing eases, Tuccillo said there may be a gradual decline of fixed-rate mortgage interest rates. Tuccillo said he expects long-term mortgage rates, which stood at about 10.5 percent when the budget reconciliation act passed last month, to slide to 10 percent by May or June.

Interest rates aside, borrowers who went to home closings on Nov. 1 were the first to get hit with a higher funding fee on mortgages insured by the Department of Veterans Affairs. The fee is used to offset the program's operations, including default payments, which have proven particularly high in recent years.

The 0.625-percentage-point increase raised the fee to 1.875 percent of the loan amount for the estimated 85 percent of VA borrowers who make no down payment or a down payment of less than 5 percent.

Borrowers may finance the fee as part of their mortgage. The increase would add up to $2 a month to a veteran's mortgage payments, said Alan Schneider, the VA's deputy director for loan guarantee services.

Borrowers who make down payments of 5 percent to slightly less than 10 percent will now pay a 1.375 percent fee, while those withdown payments of 10 percent or greater pay 1.125 percent. Borrowers refinancing loans also face the top 1.875 percent fee regardless of the amount of equity in their properties.

The VA fee increases are projected to raise $79 million for the federal government over the next five years.

The seemingly sacrosanct mortgage interest deduction took a slight hit from the budget negotiators.

Taxpayers filing singly or jointly with adjusted gross incomes of $100,000 or more will see their itemized deductions reduced by 3 percent in 1991. Typically, the mortgage interest deduction amounts to one of the larger exemptions most taxpayers claim.

The mortgage interest deduction portion of the change will raise about $4.5 billion for the U.S. Treasury, said Floyd Williams, legislative counsel for the National Association of Home Builders.

Yet, the impact on affected home buyers -- 2.3 percent of taxpayers met or exceeded the $100,000 adjusted gross income threshold in 1988 -- appears negligible.

For example, the new rule would force a family with $125,000 adjusted gross income and a $300,000 mortgage to lose out on $210 in deductions, raising the household's tax liability to $14,979, said Richard Peach, an economist for the Mortgage Bankers Association.

Williams said the home builders group did not oppose the challenge to the inviolability of the mortgage interest deduction for a variety of reasons.

"It {fosters} good government {by lowering the deficit}, it does not single out mortgage interest from other deductions, it affects a small number of people and it does not create a disincentive to trade up to a larger house," he said.

Nonetheless, Williams said he is worried the provision creates a "back door" for Congress to effectively raise taxes in the future.

Warren Lasko, executive vice president of the Mortgage Bankers Association, views the change with greater trepidation. The move, he said, amounts to the "camel's nose under the tent" in that Congress will feel free to roll back the mortgage interest deduction more steeply for a greater number of taxpayers.

For much of the budget debate, the 20-year-old mortgage revenue bond program looked like it had supplied its last below-market mortgage, but a charge led by the National Council of State Housing Agencies persuaded Congress to reconsider.

The program, which costs taxpayers $400 million over five years saves eligible first-time home buyers about $1 billion a year by shaving 2 to 2.5 percentage points off of the market rate of interest, said John T. McEvoy, the council's executive director. State and local finance authorities are able to raise mortgage capital at favorable rates because interest earned by bond investors is tax deductible.

Program eligibility is restricted by family income and the purchase price of the home. In 1989, the average income of mortgage revenue bond borrowers in the Washington metropolitan area was $30,810 and the average purchase price of a home was $80,000, according to the state housing agency group.

The low-income housing tax credit also survived the great budget debate, although its five-year price tag of $1.7 billion made it a tempting target.

Renewal of the program for another year will create $325 million worth of credits nationally next year, which should produce 125,000 units of low-income housing in 1991. Last year, the credit funded the creation of 202 units of low-income housing for the District, 1,880 in Maryland and 2,363 in Virginia, according to the National Council of State Housing Agencies.

The budget cutters did restore a relatively shallow tax-rate break on profits earned from the sale of real estate and other assets. Long championed by President Bush, the new tax law only spares taxpayers in the highest tax bracket from paying taxes on capital gains at a rate 3 percentage points lower than otherwise.

The move, Williams said, will "not have much revenue impact one way or the other," because he doubts that a 3 percent differential will create much of a "stimulative effect" for the sale of assets, unlike other alternatives floated earlier in the budget process that would have taxed capital gains at a much lower 15 percent or 17 percent rate.

Williams said real estate investors but few homeowners, other than those selling second homes, are likely to take advantage of the new tax treatment for capital gains. Profits from the sale of primary residences, he noted, are currently covered by one of two exemptions that Congress left untouched.

A homeowner can already defer taxation by buying another home of equal or greater value to the one sold. Homeowners 55 or older can also keep $125,000 in house profits tax-free by exercising a one-time right to exclude up to that amount of profit from the calculation of tax owed.

Congress also backed away, at least temporarily, from a plan that would force two major suppliers of mortgage capital to obtain triple-A ratings from credit-rating agencies.

The Federal Home Loan Mortgage Corp. (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) oppose using that yardstick as a measure of their financial soundness. The companies buy mortgages from lenders and pool them into securities they then sell to investors.

The battle, however, is not over for the congressionally chartered agencies, in the view of Robert Cushman, Freddie Mac's vice president of government and industry relations. The Treasury, which has pushed the triple-A rating idea, he said, "never gives up."