FACTBOX: Obama's new priorities for financial rescue fund

(Reuters) - President-elect Barack Obama is campaigning to access a $350 billion fund to restore damaged financial markets and help the country work through a serious economic downturn.

In order to unlock that money -- the second half of the $700 Troubled Asset Relief Program -- Obama must map out how he plans to spend the funds and persuade a skeptical Congress that they will help revive credit markets and the broader economy while ensuring transparency and oversight.

An 18-page formal request from the Bush administration on Obama's behalf said the remaining funds could be used partly to help homeowners and to expand existing programs for financial firms. It offered few details but started a 15-day clock on Monday for lawmakers to decide whether to block the request.

Below are some of the new initiatives and reforms to the Troubled Asset Relief Program favored by the Obama team that have backing from Rep. Barney Frank, the chairman of the House of Representatives Financial Services Committee.

* Help struggling homeowners avoid foreclosure -- Frank has asked for $40 billion to guarantee troubled home loans, lower monthly payments and restore investor confidence in the mortgage market. White House economic adviser Lawrence Summers did not put a dollar figure on foreclosure aid, but said in a letter to congressional leaders that reducing mortgage payments for economically stressed borrowers and reforming bankruptcy laws to modify loans were priorities.

* Aid cash-strapped towns and cities - Municipal bonds are typically a favorite of conservative investors but the current credit woes have spooked Wall Street and raised borrowing costs for states, cities and towns, straining their budgets. A federal guarantee program could lower those costs.

* Soothe consumer credit markets - The Federal Reserve has helped loosen the market for consumer and small business loans through fresh lending. Frank and departing Treasury officials have said such programs could be expanded to additional types of securities, such as commercial mortgage-backed securities, in the second phase of TARP. Summers pledged to "use our full arsenal of tools" to restart lending for small businesses, auto purchases and municipalities.

* Increase oversight - An independent auditing panel has criticized the Treasury for poor supervision of the TARP program and Obama has said more oversight is needed. Summers pledged to reform the oversight and accounting of the program. New systems to track the government outlays and effectiveness tests are likely. He also pledged to pursue regulatory reform to better protect investors, consumers and the economy.

* Impose tougher terms on companies receiving taxpayer assistance - Summers pledged to ensure that government aid will not enrich shareholders or executives. Firms receiving exceptional assistance will be subject to tougher limits on executive compensation, dividends, stock buybacks and the acquisition of companies that are financially strong.