FACTBOX: Obama has new priorities for financial rescue

WASHINGTON (Reuters) - President-elect Barack Obama may soon have access to a $350 billion fund to restore damaged financial markets and help the nation work through a serious economic downturn.

In order to unlock that money - the second half of a $700 billion kitty - Obama must map out how he plans to spend the funds and convince Congress that they will help restore credit markets and the broader economy.

Below are some of the programs that the Obama team favors and that have backing from Rep. Barney Frank, chairman of the House Financial Services Committee.

* Help struggling homeowners avoid foreclosure - Frank has asked for $40 billion to guarantee troubled home loans, lower their monthly payments and restore investor confidence in the mortgage market.

* 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 cities and towns. A federal guarantee 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 has said such programs could be expanded with Treasury cash.

* Increase oversight - An independent auditor has criticized the Treasury for poor supervision of the TARP program and Obama has said more oversight is needed. New systems to track the government outlays and effectiveness tests are likely.

(Reporting by Patrick Rucker; Editing by Anthony Boadle)