FACTBOX: Scenarios for possible Fannie, Freddie government help

WASHINGTON (Reuters) - The shares of Fannie Mae and Freddie Mac plummeted this week as concerns about their capital position gave way to reports of a possible U.S. government takeover of the two mortgage-finance companies.

Given that regulators have been reluctant to provide an explicit guarantee to support the two companies, tools are limited in ways they can aid the nation's two largest sources of mortgage finance. Here are several ways to maintain Fannie Mae and Freddie Mac as going concerns:

1) Washington could open its discount window and directly lend to Fannie Mae and Freddie Mac, allowing them to receive relatively inexpensive funds as needed and without forcing the two companies to sell assets and potentially exacerbate already anemic credit markets.

"Both the Fed and the Treasury are looking at various options ... like the discount window," said Senate Banking Committee Chairman Chris Dodd on Friday.

2) Capital raising: This step would be difficult for either Fannie of Freddie given the recent sharp drops in their common and preferred stock prices. The GSEs could raise capital with more preferred or common stock offerings. The two have already raised $20 billion this way since last fall.

David Beim, Columbia Business School professor, said Fannie Mae and Freddie Mac have long needed more capital and it was a mistake not to insist on such a step earlier.

3) Raising the Treasury line of credit "to a respectable $50 billion or $100 billion would go a long way toward restoring the luster of the 'implicit' guarantee. This is obviously a less drastic step than Treasury explicitly guaranteeing GSE debt," said Barclays Capital in a research note.

Fannie Mae and Freddie Mac each now have a $2.25 billion line of credit with the Treasury.

4) Fannie Mae and Freddie Mac could also issue a new class of preferred stock, if the companies cannot raise capital via private sources.