WASHINGTON — The Federal Housing Administration is tightening rules for lenders after reporting that its financial cushion will sink below mandatory levels for the first time in its 75-year history.

Officials, however, insisted yesterday that the agency won't need a rescue.

"Under no circumstance will any taxpayer bailout be needed," said David Stevens, the FHA's commissioner. The agency doesn't expect to raise fees for borrowers, he said, or curtail the number of loans it insures.

Amid the collapse of the subprime lending market, the government has taken up the slack. The FHA has insured nearly a quarter of all new loans made this year, and about 80 percent of that business is from first-time homebuyers.

But the agency has faced concerns on Capitol Hill that it will soon need a taxpayer bailout. As of this summer, about 17 percent of FHA borrowers were at least one payment behind or in foreclosure, compared with 13 percent for all loans, according to the Mortgage Bankers Association.

The FHA's capital cushion will drop below 2 percent of the roughly $675 billion in mortgages insured by the agency this fiscal year, an outside audit has found.

"For too long FHA has not been able to control its losses," said Sen. Kit Bond, R-Mo.

Plummeting home prices are the main reason the agency's financial reserves are dwindling. Its previous analysis had assumed prices would hit bottom this year, but the agency is now expecting prices will fall through next spring. Lower prices mean bigger losses if the FHA has to foreclose and re-sell a property.

"While FHA didn't take part in the housing boom, it's not immune from the ripple effect of declining house prices," said Brian Montgomery, the agency's former commissioner. "That's quite frankly what this is about."

The agency itself does not make loans, but offers insurance against default. Many borrowers are willing to pay for the insurance because FHA loans only require down payments of 3.5 percent of the purchase price.