Federal Housing Administration (FHA) chief David Stevens has confirmed that the government's mortgage insurer will see its reserves fall below the 2% minimum level set by Congress but said the agency is tightening its credit standards to bolster the fund.

"To be clear, the fund's reserves are sufficient to cover our future losses, so FHA will not require taxpayer assistance or new congressional action," Stevens said.

Today, FHA accounts for 25% of all residential mortgages written — a stark contrast to three years ago when the agency had a mere 3% market share.

An independent audit of the FHA's insurance fund is due out in the next few weeks.

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