diff --git a/litellm/proxy/spend_tracking/budget_reservation.py b/litellm/proxy/spend_tracking/budget_reservation.py
index c23f444595c..b17251f4b55 100644
--- a/litellm/proxy/spend_tracking/budget_reservation.py
+++ b/litellm/proxy/spend_tracking/budget_reservation.py
@@ -85,6 +85,7 @@ async def reserve_budget_for_request(
         route=route,
         llm_router=llm_router,
     )
+    using_remaining_budget_fallback = reservation_cost is None
     if reservation_cost is None:
         reservation_cost = await _get_smallest_remaining_budget(
             counters=counters,
@@ -111,6 +112,18 @@ async def reserve_budget_for_request(
                     cached_spend = await _get_current_counter_value(counter=counter)
                 current_spend = cached_spend + reservation_cost
             if current_spend > counter.max_budget:
+                if using_remaining_budget_fallback:
+                    remaining_before_reservation = counter.max_budget - (
+                        current_spend - reservation_cost
+                    )
+                    if remaining_before_reservation > 0:
+                        await _resize_applied_reservation(
+                            entries=applied_entries,
+                            current_reserved_cost=reservation_cost,
+                            new_reserved_cost=remaining_before_reservation,
+                        )
+                        reservation_cost = remaining_before_reservation
+                        continue
                 raise litellm.BudgetExceededError(
                     current_cost=current_spend,
                     max_budget=counter.max_budget,
@@ -632,6 +645,19 @@ async def _set_reserved_entries_adjustment(
         entry["applied_adjustment"] = target_adjustment
 
 
+async def _resize_applied_reservation(
+    entries: List[dict],
+    current_reserved_cost: float,
+    new_reserved_cost: float,
+) -> None:
+    await _set_reserved_entries_adjustment(
+        entries=entries,
+        target_adjustment=new_reserved_cost - current_reserved_cost,
+    )
+    for entry in entries:
+        entry["applied_adjustment"] = 0.0
+
+
 def _counter_to_reservation_entry(counter: _BudgetCounter) -> Dict[str, Any]:
     return {
         "counter_key": counter.counter_key,
@@ -653,7 +679,7 @@ def get_budget_window_start(window: Any) -> Optional[datetime]:
 
     reset_at = _coerce_datetime(window_dict.get("reset_at"))
     if reset_at is None:
-        reset_at = datetime.now(timezone.utc) + timedelta(seconds=duration_seconds)
+        return datetime.now(timezone.utc) - timedelta(seconds=duration_seconds)
     if reset_at.tzinfo is None:
         reset_at = reset_at.replace(tzinfo=timezone.utc)
     return reset_at - timedelta(seconds=duration_seconds)
diff --git a/tests/test_litellm/proxy/test_budget_reservation.py b/tests/test_litellm/proxy/test_budget_reservation.py
index 481d88b8d04..51016126d35 100644
--- a/tests/test_litellm/proxy/test_budget_reservation.py
+++ b/tests/test_litellm/proxy/test_budget_reservation.py
@@ -1,3 +1,4 @@
+from datetime import datetime, timedelta, timezone
 from unittest.mock import AsyncMock, MagicMock, patch
 
 import pytest
@@ -16,6 +17,7 @@ from litellm.proxy._types import (
 )
 from litellm.proxy.spend_tracking.budget_reservation import (
     estimate_request_max_cost,
+    get_budget_window_start,
     invalidate_budget_reservation_counters,
     release_budget_reservation,
     reserve_budget_for_request,
@@ -478,6 +480,75 @@ async def test_should_reserve_remaining_budget_when_output_cap_missing(
     await release_budget_reservation(reservation)
 
 
+@pytest.mark.asyncio
+async def test_should_shrink_uncapped_reservation_when_counter_advances(
+    spend_counter_state,
+    monkeypatch,
+):
+    counter_cache, key_cache = spend_counter_state
+    proxy_logging_obj = ProxyLogging(user_api_key_cache=key_cache)
+    valid_token = UserAPIKeyAuth(
+        token="key-budget-uncapped-race",
+        spend=0.2,
+        max_budget=1.0,
+    )
+    request_body = _request_body()
+    request_body.pop("max_tokens")
+
+    from litellm.proxy.spend_tracking import budget_reservation
+
+    async def stale_counter_read(counter):
+        await counter_cache.async_increment_cache(
+            key=counter.counter_key,
+            value=0.3,
+        )
+        return 0.2
+
+    monkeypatch.setattr(
+        budget_reservation,
+        "_get_current_counter_value",
+        stale_counter_read,
+    )
+
+    with patch(
+        "litellm.proxy.spend_tracking.budget_reservation.estimate_request_max_cost",
+        return_value=None,
+    ):
+        reservation = await reserve_budget_for_request(
+            request_body=request_body,
+            route="/chat/completions",
+            llm_router=None,
+            valid_token=valid_token,
+            team_object=None,
+            user_object=None,
+            prisma_client=None,
+            user_api_key_cache=key_cache,
+            proxy_logging_obj=proxy_logging_obj,
+        )
+
+    assert reservation is not None
+    assert reservation["reserved_cost"] == pytest.approx(0.7)
+    assert counter_cache.in_memory_cache.get_cache(
+        key="spend:key:key-budget-uncapped-race"
+    ) == pytest.approx(1.0)
+
+    await release_budget_reservation(reservation)
+
+    assert counter_cache.in_memory_cache.get_cache(
+        key="spend:key:key-budget-uncapped-race"
+    ) == pytest.approx(0.3)
+
+
+def test_should_start_window_without_reset_at_at_duration_boundary():
+    before = datetime.now(timezone.utc) - timedelta(hours=1)
+
+    window_start = get_budget_window_start({"budget_duration": "1h"})
+
+    after = datetime.now(timezone.utc) - timedelta(hours=1)
+    assert window_start is not None
+    assert before <= window_start <= after
+
+
 @pytest.mark.asyncio
 async def test_should_seed_malformed_window_counter_from_parent_authoritative_spend(
     spend_counter_state,