It should be possible to create a U.S. housing finance system without the need for potentially risky entities like government-sponsored mortgage finance agencies Fannie Mae and Freddie Mac, Federal Reserve Chairman Ben Bernanke said.

Bernanke, in a letter to Representative Marcy Kaptur that was released on Friday, said the housing finance system should ensure successful funding of mortgages and support a secondary mortgage market even during times of financial stress without creating firms that pose systemic risk.

There are a variety of organizational forms that might replace Fannie Mae and Freddie Mac that could likely provide mortgage credit without the systemic risks associated with these institutions in the past, he said in the letter.

Fannie Mae and Freddie Mac , which own or guarantee around half of U.S. mortgages, were taken over by the federal government at the height of the financial crisis in 2008 as loan losses mounted. The firms were shareholder-owned but operated under a congressional charter, which led investors to believe the government would bail them out in a crisis.

The companies do not lend directly to home owners, but buy mortgages from lenders and repackage them as securities or hold them in their own portfolio as part of a system that was seen as ensuring widely available funding to support homeownership. Fannie Mae and Freddie Mac operate under a mandate to promote affordable housing

The firms remain under government control, and the Obama administration is only just beginning to grapple with how to overhaul the housing finance system.

Many blame the implicit government guarantee for debt issued by Fannie Mae and Freddie Mac for playing a leading role in inflating a housing bubble that then burst and led to a painful recession.

The two companies have already received more than $146 billion in assistance from the government's unlimited credit line, and Fannie Mae on Thursday asked for an additional $1.5 billion in taxpayer aid.

The Fed chairman said he backs a proposal by Treasury Secretary Timothy Geithner that would encourage risk-based pricing of any government guarantees.

Such explicit pricing is a key step toward stopping any transference of bad assets by the private sector to government agencies or enterprises, and for encouraging prudent lending and a sound mortgage finance system, he said.

(Reporting by Mark Felsenthal; Editing by Leslie Adler)