By Lynn Adler

NEW YORK (Reuters) - Freddie Mac's $3 billion bill auction on Monday, seen by the market as a critical test of the U.S. home funding company's borrowing access, indicated "business as usual" and continued robust foreign demand, the company's treasurer said.

The U.S. government on Sunday announced sweeping measures to restore market confidence after fears about capitalization at Freddie Mac and Fannie Mae pummeled their shares to 17-year lows last week.

Freddie Mac sells bills each week as part of routine financing of its operations. Its sale of bills early Monday was being scrutinized for clues about any changes to the company's ability to tap the debt markets.

"I would say it's business as usual, funding costs were in line, the investor base was in line, the bid to cover was higher than we've seen recently," Timothy Bitsberger, treasurer of the second-largest provider of U.S. home funding, told Reuters in a telephone interview.

"From a funding program standpoint, we have not seen to date a crisis of confidence," Bitsberger said. "Our auctions went well last week, they went well the week before and the week before that, and so on, and it went well today."

Foreign investment, he added, "still remains very, very strong."

On Sunday, the Treasury Department agreed to raise Fannie Mae's and Freddie Mac's credit lines and buy their shares if needed to bolster the companies. The Federal Reserve offered to allow the agencies to borrow at the rate it charges banks for direct loans.

The government has increasingly relied on these two largest U.S. home funding companies, which are federally chartered but shareholder owned, to help stabilize one of the worst housing markets since the Great Depression.