* Gets $25 mln investment from MatlinPatterson

* Transaction part of $100 mln investment plan

Feb 18 (Reuters) - Flagstar Bancorp Inc, one of the largest savings and loans based in the U.S. Midwest, said MatlinPatterson Global Advisers LLC completed a $25 million investment in the company through the purchase of its shares.

The Troy, Michigan-based thrift sold 25,000 shares of its convertible participating voting preferred stock, series B, in lieu of the deal, Flagstar said in a statement.

These shares will be convertible into 31.3 million shares of the company's common stock at 80 cents a share, Flagstar said.

The company, which has $14.2 billion in total assets, said the investment is a part of a previously announced agreement by MatlinPatterson to buy $100 million in equity capital from Flagstar.

The $100 million investment plan is in addition to the $250 million in equity capital purchased by MatlinPatterson on Jan. 30, 2009.

Flagstar joins a growing number of U.S. lenders that are raising capital as the nation's housing slump and slow economic growth cause loan losses to mount.

Last month, the company reported a wider-than-expected loss for the fourth quarter, and said five of its directors will be stepping down.

Shares of the company closed at 74 cents Tuesday on the New York Stock Exchange. (Reporting by Adheesha Sarkar in Bangalore; Editing by Pratish Narayanan)