The struggle over how to use the shrinking supply of money available for housing is intensifying as Congress awaits the Bush administration's 1992 budget proposal, industry and government officials said this week.

The National Affordable Housing Act, passed with great fanfare late last year, authorizes spending $24.8 billion on housing and community development in fiscal 1991 and $27.2 billion in fiscal 1992, which begins Oct. 1. Nowhere near that much money, however, will be provided by the congressional appropriations committees, these officials agreed.

Small increases in domestic spending are allowed under last year's deficit reduction agreement, but experts predict that most and perhaps all of the additional money earmarked for housing and other domestic programs in the 1992 budget will be eaten up by inflation. The administration's spending proposal is due on Capitol Hill Feb. 4.

Sharp differences on how to spend the housing money that will be allocated in the new budget have been surfacing for weeks along with reports that the administration wants to switch money earmarked for public housing construction in the current budget to its new homeownership program for low-income families. Mary S. Brunette, HUD assistant secretary for public affairs, said she could not comment on these reports.

But the Department of Housing and Urban Development would like to launch the program Homeownership and Opportunity for People Everywhere (HOPE) this year if money becomes available, Brunette said.

Regulations implementing the legislation, which authorizes spending of $158 million this year and $855 million next year, will be ready by early February.

The HOPE program is HUD Secretary Jack Kemp's cherished initiative for selling public housing apartments to the low-income families who live in them and for helping poor families buy homes through other programs.

Brunette said HUD also will have rules in place soon to launch Congress's Home Investment Partnerships program, which authorizes spending $1 billion this year and more than $2 billion in 1992 to help state and local governments build new rental housing and rehabilitate existing buildings, she said. The Home program also will aid low-income families who want to buy homes.

Congress is unlikely to go along with any effort to switch funds authorized for public housing this year to the new home ownership programs, key House and Senate aides said this week. "Just because the administration doesn't seem to care too much for {public housing construction and modernization} doesn't mean that Congress doesn't care," one aide said.

The new housing bill authorizes nearly $3 billion this year for public housing programs. Of this amount, more than $2 billion would be used to rehabilitate deteriorated apartments and the remainder would finance construction of about 13,000 new units of public and Indian housing.

Bruce J. Katz, counsel for the Senate Banking, Housing and Urban Affairs Committee's housing subcommittee, predicted a fierce fight among groups wanting to spend next year's scarce funds on new housing authorized by the legislation and those who want to preserve the existing rental stock.

Saving 360,000 apartments nationwide, now endangered by the end of agreements that kept them affordable for poor families, will cost $27.4 billion over the next two decades, according to the Office of Management and Budget. The money is needed to implement a provision in the new housing act that will preserve the units without penalizing property owners, who used federally subsidized loans to construct the buildings. In return, the owners agreed to rent to poor residents for at least 20 years, but are now nearing the end of their obligation.

Katz, speaking at a briefing on the new housing act this week, said the "hard part is going to begin" when the appropriations subcommittees begin work in the coming weeks. Staffs of housing committees in Congress, discussing the new law with various housing groups, also said fighting for the money in a shrinking pot will become contentious.

Any increase in housing spending will come at the expense of other programs, said Paul Leonard, an expert on appropriations for the Center on Budget and Policy Priorities. The subcommittees that allocate funds to HUD also dispense money to the Department of Veterans Affairs and several smaller agencies with "very well organized lobbies," he said.

These include the National Aeronautics and Space Administration, the National Science Foundation and the Environmental Protection Agency, which will have require sizable inreases in appropriations, a House appropriations committee staff aide said. The VA's medical program required $12.3 billion in 1991 and will need an increase of about 8 percent this year, he said, adding that "it's going to be tough to come up with substantial increases in HUD programs in 1992."