NYSE-listed Flagstar Bancorp Inc. has finally secured preliminary nod from the United States Department of the Treasury of its application to participate in Treasury's Capital Purchase Program. 

Under the Capital Purchase Program, Flagstar is eligible to sell to Treasury up to $266 million of newly issued Flagstar preferred stock, which will carry a 5% coupon for five years, and 9% thereafter. 

In addition, Treasury will receive warrants to purchase shares of Flagstar common stock in accordance with the terms of the Capital Purchase Program. These warrants will expire in 10 years.

However, the final approval from Treasury is subject to satisfaction of certain conditions.

The scrip of Flagstar was closed on Wednesday at $0.71. It touched an intraday high and low of $0.74 and $0.67.