Obama administration says housing agency needs $943 million

(Reuters) – The cash-strapped Federal Housing Administration will likely require a $943 million taxpayer bailout to cover expected losses on loans it insured as the U.S. housing bubble was deflating, the Obama administration said on Wednesday.

It would be the first bailout of the government’s mortgage insurer in its nearly 80-year history.

The White House estimated the FHA has about $30 billion on hand, but said its cash reserves would likely be swamped by souring loans.

FHA Commissioner Carol Galante said the agency still might be able to avoid taking aid from the U.S. Treasury, despite the financial hole projected in President Barack Obama’s 2014 budget proposal. It has until September 30 to decide whether it needs a cash infusion.

“FHA, while still under stress from legacy loans, has made significant progress and is on a sound fiscal path forward,” she told reporters on a conference call.

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