UPDATE 3-U.S. closes BankUnited, sells to private equity

* Investor group includes WL Ross, Carlyle, Blackstone

* BankUnited had $12.8 bln in assets, largest Florida bank

* Becomes 34th U.S. bank to fail so far this year (Adds Toronto Dominion involvement, advisors)

By Karey Wutkowski and Dan Wilchins

WASHINGTON/NEW YORK, May 21 (Reuters) - U.S. bank regulators seized troubled Florida lender BankUnited FSB and sold it to some of the most powerful private equity firms in the world.

Firms including Wilbur Ross's WL Ross & Co, Carlyle Group [CYL.UL], Blackstone Group (BX.N), and Centerbridge Partners are putting up $900 million of capital to rescue the bank, the biggest independent bank in Florida.

The failure is the largest this year, and will cost the Federal Deposit Insurance Corp (FDIC) an estimated $4.9 billion.

The FDIC said on Thursday it is close to providing more guidance for how private equity firms can invest in failing banks. The government is looking for ways to better tap the $1 trillion of total uninvested private equity capital as bank failures accelerate.

John Kanas, a veteran of the banking industry and former head of North Fork Bank, will manage BankUnited.

Kanas must fix a bank that failed after making risky loans known as "option adjustable rate mortgages," which allow borrowers to choose how much principal to repay every month. These have proven some of the most toxic mortgages during the housing crisis, and the bank's Florida base is one of the epicenters of that crisis.

But the state still offers opportunity, Ross told Reuters.

"Florida has a very good long-term outlook, not just because of its weather, but also because of its tax policies," Ross said.

"As states in the Northeast grapple with budget problems, people will migrate to lower tax areas like Florida," he added.

Kanas said on a media conference call that his group expects to see more distressed banks in the state, and will consider bidding on them.

"LEAST COSTLY"

Bank United FSB, the regulated bank that failed, had $12.8 billion of assets, and $8.6 billion of deposits. Its parent company was BankUnited Financial Corp. BKUNA.O.