* Goldman seeking millions of dollars of tax credits
* Administration wary; deal would help Goldman cut tax bill
* Will only approve if in taxpayers' interest - Treasury (Adds Treasury, Goldman comments)
NEW YORK, Nov 1 (Reuters) - Goldman Sachs Group Inc (GS.N) is in talks to buy millions of dollars of tax credits from Fannie Mae FNM.N, but the U.S. Treasury could block the deal, The Wall Street Journal reported on Sunday.
Goldman hopes to win approval this week, but the administration is wary about approving a deal that would help the bank reduce its tax bill, the Journal reported on its website.
"Treasury is reviewing and will not let it proceed unless it is clearly in the taxpayers' interest," Treasury spokesman Andrew Williams said, without providing further comment or details.
A Goldman spokesman had no comment. Spokespeople for Fannie and the Federal Housing Finance Agency (FHFA) were not immediately available for comment.
Fannie Mae, the mortgage giant controlled by the U.S. government, could get financial relief if Goldman bought the tax credits, the Journal reported.
Goldman could line up other investors for the deal as well, according to the paper.
Tax credits are incentives designed to bring more investment to low-income housing developments. (Reporting by Anupreeta Das, Timothy Ahmann and Corbett Daly; Editing by Bernard Orr and Ian Geoghegan))