It marks the second time the government has stepped in to shore up the mammoth Detroit-based lender, which received $5 billion in December from the government's $700-billion financial bailout program.

GMAC, which reported a first-quarter loss of $675 million, has seen rising defaults in its auto finance division. That, combined with soured assets in its Residential Capital mortgage unit, made it more difficult for the company to raise capital from private investors.

Treasury said it won't immediately expand its 36 per cent equity interest in GMAC but will exercise in the near future its right, under an earlier agreement, to exchange an $884 million loan it made to General Motors for an equity share in GMAC. If the government were to exercise all its options under the rescue deal, it would wind up owning more than 50 per cent of the company, senior administration officials said.

In return for giving GMAC aid in December, the government got 5 million shares and told the company it must extend financing services to bailed-out Chrysler - which filed for bankruptcy protection on April 30.

Of the new $7.5 billion injection, $4 billion will go to support GMAC's new loans to Chrysler dealers and customers. The remaining $3.5 billion will go toward boosting GMAC's capital base - still short of the $11.5 billion the government's "stress test" showed the company needs to stay afloat amid further economic decline.

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