The F.H.A., which offers private lenders guarantees against homeowner default, has just $2.6 billion in cash reserves, the report found, down from $4.7 billion last year.

The agency’s woes stem from the national foreclosure crisis. In the last three years, the F.H.A. has paid $37 billion in insurance claims against defaulting homeowners, shrinking its cash cushion.

The auditors determined the agency’s level of supplemental cash reserves by projecting losses on its mortgage portfolio and counting them against expected premium revenue. This year, the audit found that the F.H.A. supplemental reserve was less than one-quarter of a percentage point of its current portfolio: $2.6 billion against a $1.1 trillion mortgage portfolio, as of Sept. 30. Legally, the housing agency is required to keep a 2 percent cash buffer, a target it has not met since 2008.

F.H.A. officials argue that the likelihood the 77-year-old agency will need its first taxpayer bailout is slim. “It would take very significant home price declines to create a situation in which the portfolio would require any additional support,” said Carol Galante, acting commissioner. “There is no evidence or widespread prediction that home prices are going to decline to the kind of levels” requiring a bailout, she said.

The baseline plan included in the report does not foresee the F.H.A.’s going into the red. It presumes that home prices will stabilize in coming months and start to rise in 2012. In that case, the agency’s capital ratio will increase to 1 percent in 2012 and 2 percent, the legal minimum, in 2014.

But if housing prices decline, losses from an enormous cohort of loans, most originated between 2006 and 2009, could subsume the agency’s reserves. The audit contends that “significant declines of home prices” in fiscal year 2012 “would create a situation in which the current portfolio would require additional support” from the Treasury Department. In the worst case provided in the report, housing prices would continue to decline through 2014 and the agency would require a total of $43.2 billion from the Treasury. (Congress would not need to approve these funds.)

Ms. Galante said that before the agency got to that point, it would consider several measures, including raising the F.H.A. insurance premiums borrowers pay.

Traditionally, the F.H.A. has helped borrowing by first-time home buyers or those with low to moderate income. When the housing bust hit, the agency greatly expanded its purview, and the value of its loan portfolio more than tripled. In 2006, the F.H.A. backed about 5 percent of mortgages. In 2010, it insured one-third.

The F.H.A. provides lenders with a guarantee if mortgages meet certain underwriting criteria. It finances itself by charging borrowers a premium that offsets the cost of payouts on defaulting loans.

Numerous independent reports in the last three years have predicted the agency’s insolvency. Last week, for instance, the American Enterprise Institute, a policy research organization, released a study by Joseph Gyourko, a professor at the Wharton School at the University of Pennsylvania, stating that the agency was underestimating its future losses by “tens of billions” and arguing that “the recapitalization required will be at least $50 billion, and likely much more.”

“If the economy and housing markets deteriorate unexpectedly, we need to be ready to infuse even more capital” into the reserve account, Mr. Gyourko wrote, estimating that the F.H.A. may ultimately need as much as $100 billion.

Many housing experts have called for additional Congressional oversight of the agency, given the possibility of a bailout. “Along with Fannie Mae and Freddie Mac, the F.H.A. is the third leg of the government stool supporting the entire housing market,” said Christopher Papagianis, managing director of Economics21, a research organization. “What is embarrassing for Congress is that, unlike Fannie and Freddie, the F.H.A. is directly under their purview. It’s always been a government agency, subject to hearings and oversight. They clearly haven’t been minding the store, given this report.”

Other housing experts caution that the F.H.A.’s insolvency is not a foregone conclusion. “Whether or not they are adequately capitalized depends on their projections,” says Ann B. Schnare, an independent housing consultant, who has studied F.H.A. solvency. “But they have been over-optimistic about their future book for three or four years. Every year, it’s like, ‘We’re losing on this end, but we’re going to make it up going forward!’ ”

Ms. Schnare added: “They are doing very high loan-to-value loans in a market that is extremely fragile. People are entering the program without a lot of equity. They’re skating on thin ice.”

The F.H.A. report comes as lawmakers are considering raising the maximum loan amount that the agency can guarantee, possibly exposing the agency to more risk. On Oct. 1, the ceiling dropped to $625,500, from $729,750, in some high-cost areas like the New York metropolitan area. However, a bill moving through Congress would return the ceiling to the higher level.

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