Your Servicer Is Now Allowed to Tell You Your PMI Can Come Off. Nothing Makes It. Ask Anyway.

Update, September 30, 2026: The gag is off. Fannie Mae Lender Letter LL-2026-07 took effect immediately on September 16, three days before this ran, so our line that no effective date had been published was wrong. We’ve corrected it below. The advice stands: the letter permits the call, it doesn’t require one, and cancellation still starts with your request.

If you bought with less than 20 percent down and your house has gained value since, you might be able to stop paying private mortgage insurance this month. Your servicer can see that on its own screen. Until September 16, Fannie Mae’s rulebook told it to keep quiet.

The online guide still prints the sentence. Servicing Guide B-8.1-04: “The servicer must not solicit a borrower for MI termination based on current value of the property.” Not “does not have to.” Must not. Lender Letter LL-2026-07 now overrides it, and Fannie says the guide itself gets fixed in “a future Servicing Guide update.”

On September 15, FHFA director Bill Pulte said he had directed Fannie Mae to drop the line and match Freddie Mac, whose servicers were already free to go looking for those borrowers and call them. His words: “If your Home is worth more, or you have paid the loan down far enough, you should be able to drop EXTRA Mortgage Insurance.”

Fannie did it the next day. The letter says servicers may “proactively solicit borrowers” who “may be close to or have reached” the current-value thresholds. May.

You always could cancel. It was the phone call that was banned, not the cancellation.

Now the money. Freddie Mac pegs PMI at roughly $30 to $70 a month for every $100,000 borrowed. On a $350,000 loan that is $105 to $245 a month, $1,260 to $2,940 a year, for a policy that pays your lender if you stop paying. It has never covered you. About 800,000 buyers took on PMI in the year before this announcement.

Here’s what they don’t tell you: the free federal route was never watching your home’s value in the first place. The CFPB lays out the Homeowners Protection Act rights in plain terms, and every one of them runs on “original value,” which it defines as the contract sales price or the appraised value when you bought, whichever is lower. You can ask for cancellation when your scheduled balance hits 80 percent of that. Your servicer has to terminate automatically at 78 percent. And it has to end PMI the month after the midpoint of your amortization schedule, year 15 on a 30 year loan, whatever you happen to owe.

Appreciation buys you nothing on that clock, which is the trap we walked through earlier this month. It only helps on Fannie’s separate current-value path, and that one is tighter: 75 percent loan-to-value if your loan is two to five years old, 80 percent if it is more than five, 70 percent on an investment property. The servicer orders the valuation. You pay for it.

So don’t wait for the call. The outreach is now permitted, not required, and the termination steps in the guide still start with you asking. A company collecting a premium every month has no particular reason to hurry.

Do this instead. Pull your latest statement and find the principal balance. Multiply your original purchase price by 0.80. If your balance is under that number, you have a free federal request to make, and you should make it in writing today. If it is not, multiply by 0.75 and look again, because that is the current-value bar for a loan two to five years old.

Then call and ask two things: what the servicer charges for the property valuation, and whether your payment history over the last two years still qualifies you. Being late can cost you the right, and finding that out before you pay for an appraisal is worth the phone call.

Our mortgage calculator will tell you the month your scheduled balance crosses 80 percent, which is the date your free request becomes a right. More on what moves your payment in the mortgages hub.

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