President Clinton won't find it easy to convince Republicans in Congress that the FHA mortgage insurance plan should be expanded to let the government insure home loans as large as $227,150.

Under Mr. Clinton's proposal, which will be sent to Congress next month in his 1999 budget, the Depression-era program would have the same loan ceiling as Fannie Mae and Freddie Mac, the government-sponsored mortgage investors. Loans under the FHA program are now insured up to 75% of the Fannie/Freddie ceiling.

News of the President's latest plan came Saturday in a speech by Andrew Cuomo, secretary of the Department of Housing and Urban Development, to the board of the National Association of Home Builders at its annual convention.

Speaking later to reporters, Mr. Cuomo said, "We need to get the market share that we had at one time." The FHA financed 40% of the nation's housing starts in the 1940s, he said; it now finances 10%.

"In high-cost areas-California, New York, Boston-middle-class families are being priced out of the market, and FHA isn't there to help," Mr. Cuomo said.

Mr. Clinton's plan to get a higher ceiling died a quiet death last year. Congress simply didn't act on it, even though an expanded FHA program would have added revenue to the federal budget.

Rep. Rick Lazio, R-N.Y., who leads the housing subcommittee of the House Banking Committee, is likely to oppose the increase.

"President Clinton wants to pay for pet programs by expanding government's intrusion into private markets," Rep. Lazio said in a statement in 1996, when the President first proposed the increase. "The only real outcome of this proposal will be to energize Fannie Mae to engage in another expensive campaign to protect their government-subsidized market share."

As Rep. Lazio and Mr. Cuomo acknowledge, the debate over the FHA is a debate over market share.

Through a complex system of subsidies and other privileges, the government has carved up the nation's home loan market among different players.

Up to the conforming loan limit, $227,150 this year, Fannie Mae and Freddie Mac dominate the market, buying about 40% of loans.

For loans with down payments under 20% of home value, Fannie and Freddie require homebuyers to get private mortgage insurance.

The agencies have never supported the FHA's expansion, and mortgage insurers have vehemently opposed it.

In his remarks Saturday, Mr. Cuomo said he didn't "see any obvious reason" why Fannie Mae and Freddie Mac would oppose the expansion.

"The only people who go to FHA are the people the private mortgage insurers won't insure," Mr. Cuomo argued.

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