(Corrects to show FTN analyst misspoke when he said contracts to buy and retain mortgages were nearly offset by sales, in paragraph 4. A corected version is attached.)

By Al Yoon

NEW YORK, June 25 (Reuters) - Fannie Mae (FNM.N: Quote, Profile, Research) and Freddie Mac (FRE.N: Quote, Profile, Research), the largest providers of funding for U.S. residential mortgages, on Wednesday said they added to their investments at swift rates in May, though signs of future growth were uncertain.

Fannie Mae, the larger of the two government-sponsored enterprises, said its portfolio grew last month at a 15 percent annualized rate to $736.9 billion, the highest balance since August 2005. Freddie Mac's portfolio balance soared at a 53.4 percent rate, to a record $770.4 billion.

Shares of Fannie Mae and Freddie Mac jumped about 7 percent and 8 percent, respectively, in New York trading.

Contracts to buy and retain mortgages at Fannie Mae were greater than sales, said Jim Vogel, a strategist at FTN Financial Capital Markets in Memphis, Tennessee. Any sales may have been prompted by the recent rally in mortgage-backed securities, he said.

At Freddie Mac, sales were small but purchase agreements fell 40 percent to $26.2 billion.

The GSEs have sharply increased purchases of mortgages since March after their federal regulator eased requirements on capital they must hold and urged the companies to do more to help stabilize the U.S. housing market. Freddie Mac has yet to raise $5.5 billion in additional capital as promised in May, and a delay could cap its ability to follow though on its intentions to support housing through purchases, analysts said.

The GSEs' presence in the ailing housing market has increased since their access to capital markets has so far been unhindered, partly due to the perception among investors of implicit government support. But the companies are struggling to balance their growth against rising delinquencies on older loans in their portfolios and guaranteed mortgage bonds.