How Do I Get Rid of PMI Without Refinancing?

Ask. That’s the short answer, and it’s worked the whole time even though most servicers weren’t allowed to bring it up first. Private mortgage insurance, PMI, on a conventional loan can come off based on what your house is worth today, not just what you paid for it, and a rule that changed eight days ago makes it more likely your servicer raises that with you instead of waiting for you to ask.

What Changed on September 16?

Fannie Mae issued Lender Letter LL-2026-07 to every servicer that handles its loans. It permits them to reach out to borrowers who may be close to or already past the thresholds for mortgage insurance termination and tell them what it would take to get it removed. The letter’s own words say it’s effective immediately. Before that, a servicer reaching out first about this was against Fannie Mae’s rules. Now it’s allowed. Allowed, not required. Nothing in the letter says a servicer has to call.

Why Might My Servicer Not Know This Yet?

Fannie Mae’s own Servicing Guide, the rulebook servicers actually work from day to day, still carries the old sentence: the servicer must not solicit a borrower for mortgage insurance termination based on current value. That’s still sitting there this morning, and Fannie Mae says in the letter itself that the Guide won’t catch up until a future update. So a servicer that hasn’t read the new letter yet is still working off the old rule, which means asking is faster than waiting on a call that may not come for a while.

What Do I Actually Have to Clear?

Two different routes, and which one fits depends on when you bought.

The first goes off what the house was worth when you bought it. On a one-unit primary home or a second home, mortgage insurance comes off once the balance is scheduled to reach 80 percent of that original value. On an investment property, or a two to four unit primary home, it’s 70 percent.

The second goes off what the house is worth right now, and it’s the one that matters if prices near you have moved since you closed.

Two to five years: LTV has to be 75 percent or less.

More than five years: 80 percent or less.

Under two years, waived because your own improvements raised the value: 80 percent or less.

On an investment property, or a two to four unit primary home, it’s 70 percent or less, and you have to be past the two year mark.

Either way, the loan has to be current: no payment 30 or more days late in the last 12 months, none 60 or more days late in the last 24. If a payment ran late because of an actual disaster and your servicer put you on a forbearance or a repayment plan that you kept up with, that late payment doesn’t count against you.

How Does the Valuation Work?

You can’t just get your own appraisal and hand it over. If you qualify on the current-value route, your servicer orders an inspection of the inside and outside of the house through Fannie Mae’s own system. It typically takes 14 days or less, the number is good for 120 days, and there’s a way to appeal it if you think it’s wrong.

What if the Servicer Says No?

They have to tell you why, including the value they used, within 30 days.

One thing this doesn’t touch. This is Fannie Mae’s rule for conventional loans it owns or backs. FHA works under a different set of rules, and on most FHA loans today, mortgage insurance doesn’t come off at all no matter what the house is worth.

Also of note today, a different story explains why some new construction buyers end up underwater faster than everybody else.

Why Are New Construction Buyers Ending Up Underwater Faster Than Everyone Else?

Because a lot of them close with almost nothing down, and the builder two streets over can cut them into the ground.

ResiClub, citing data from the AEI Housing Center, laid out how wide that gap runs between builders in 2025. Three percent of Toll Brothers buyers financed with an FHA loan. At LGI Homes it was 53 percent. Toll Brothers’ average sale price is $996,400. LGI’s is $367,407. Ashton Woods went from 15 percent FHA in 2022 to 39 percent now.

Why Do Builders Push FHA So Hard?

FHA takes as little as 3.5 percent down, works with lower credit scores and higher debt ratios, and lets the seller, which on a new build is the builder, contribute up to 6 percent toward the buyer’s closing costs against 3 percent on a conventional loan with less than 10 percent down. HUD also cut FHA’s annual mortgage insurance premium in 2023, from 0.85 percent to 0.55 percent. Stack a builder’s own in-house lender and a bought-down rate on top of that, and a buyer who couldn’t qualify conventionally closes anyway.

I Bought a Brand New House. Why Is It Already Worth Less Than I Paid?

I laid out on September 20 how to check whether your house’s value has actually fallen and how many Florida markets have gone through a real correction. What’s specific to new construction is the arithmetic underneath it. Put 3.5 percent down, closing costs eat most of what’s left, and the builder down the street keeps cutting the price on the same floor plan, which resets the comps for the whole community. A year or two in, the house appraises under the payoff, and nothing was done wrong to get there.

ResiClub names Texas, Florida and the Mountain West as core homebuilding markets that have already gone through real price corrections. That’s not a claim about any one house. It’s the pattern the data points to in exactly the kind of new communities where loans like this are common.

Does This Mean I Should Sell?

Not something I can answer from a blog post, but I can tell you what a short sale actually has to clear if it ever comes to that: a payoff covered by the sale price, minus commission, doc stamps, title and whatever the buyer negotiates toward their own costs. On a resale bought with real equity, there’s room for all of that. On a 3.5 percent down new build in a community that’s repriced, there often isn’t, which is why that conversation reaches these owners a lot sooner than it reaches a neighbor who bought with 20 percent down back in 2019.

Jacksonville, Florida is home base, and mortgage math like this is most of what crosses my desk. Happy to walk through where your own numbers actually land.

JimArmstrong904@gmail.com, or (904) 671-4161 if a call’s easier.

Jim Armstrong, REALTOR® · Momentum Realty · SFR® (Short Sales and Foreclosure Resource) certified. This is general information, not legal, tax, or financial advice.

Momentum Realty is not associated with the government, and our service is not approved by the government or your lender.