The collapse of the housing market caused the Federal Housing Administration’s reserve ratio to drop to 0.53%, the Department of Housing and Urban Affairs announced today.

HUD Secretary Shaun Donovan said the natural improvements in the market as well as reforms such as tightened underwriting requirements and increased government oversight of lenders will cause the ratio to increase in the months ahead. Congress mandates that the ratio be 2%.

Last fall, the reserve ratio was 3%.