I’ve had hundreds of conversations about Private Mortgage Insurance over 37 years in mortgage lending. Most of them started the same way. A borrower would look at their Loan Estimate, see “PMI” in the line items, and say something like: “I don’t need that. I’ll get my own life insurance.”
That’s not what PMI is.
Mortgage insurance does not pay your survivors if you die. It protects the lender if you default. If your loan goes to foreclosure, PMI is what covers the lender’s losses. You pay for it. They benefit from it. That’s the arrangement, and it’s required any time you put less than 20% down on a conventional loan.
Once borrowers understand that, most of them move on. But a few ask the right question: when can I get rid of it?
How PMI Cancellation Actually Works Today
Under current Fannie Mae and Freddie Mac guidelines, there are two ways to cancel conventional PMI.
The automatic route: when your loan balance falls to 78% of the original purchase price based on the amortization schedule, the servicer is required to cancel it. You don’t have to ask. That’s federal law under the Homeowners Protection Act.
The request route: once your balance reaches 80% of the original purchase price, you can request cancellation. The loan needs to be current, and you need a good payment history.
Notice what’s not in either of those: your home’s current value. If you bought in 2023 and your neighborhood has appreciated 20%, that equity does not automatically count. To use current value for PMI cancellation, you have to request it from your servicer, pay for a new appraisal, and your loan typically needs at least two years of seasoning. If the appraisal supports it, the servicer can cancel based on that current value.
The cheapest path is almost always going directly to your servicer with that appraisal request, not refinancing. A refinance means you’re paying closing costs all over again. A new appraisal is a few hundred dollars.
What the Executive Order Says
President Trump signed an executive order on October 22 titled “Decreasing Housing Costs for the American People.” It addresses three areas that directly affect mortgage borrowers.
PMI cancellation. FHFA, which regulates Fannie Mae and Freddie Mac, is directed to set up a pilot program that would proactively cancel PMI for borrowers who meet equity requirements based on current property values, not just the original purchase price. Under today’s rules, you have to initiate that conversation with your servicer. Under the pilot, FHFA would build current-value equity checks into the process without waiting for borrowers to request it.
Title insurance waivers. FHFA already had a pilot program allowing some borrowers to skip lender’s title insurance on eligible refinances. The order makes that pilot permanent. Title insurance is one of the larger line items in a closing disclosure, so on eligible refinances this can reduce closing costs meaningfully. The catch, per analysts, is that the program is currently operational in only a few regions and applies to a narrow slice of refinance transactions. It does not affect purchase closings.
VA and USDA loan rates. The order directs the VA and USDA to lower rates on their single-family loan programs. Both are government-backed programs designed for borrowers with no down payment: VA for eligible veterans and service members, USDA for qualifying rural and suburban areas. No specific rate reduction amounts or effective dates were reported. If you have or are pursuing a VA or USDA loan, watch for guidance from those agencies directly.
Here’s the Part You Need to Hear
No pilot is running yet. There are no effective dates, no published eligibility criteria, and no final order text confirmed on the White House site as of this writing. Your servicer will not cancel your PMI because a fact sheet was released.
That’s how Washington works. A directive gets signed. The regulatory machinery takes months to design and implement the actual program. If any part of this goes through formal rulemaking, there will be public comment periods before anything takes effect.
One more thing worth flagging: the PMI and title provisions in this order run through FHFA, which covers conventional loans backed by Fannie Mae and Freddie Mac. If you have an FHA loan, mortgage insurance (MIP) is a separate program governed by HUD. On FHA loans originated after June 2013 with less than 10% down, MIP is currently permanent for the life of the loan. Whether this executive order addresses FHA MIP was not confirmed in reporting available as of this writing. If you have an FHA loan, verify directly with HUD or a HUD-approved housing counselor before expecting any change.
What You Can Do Right Now
Pull your most recent mortgage statement and look at the outstanding balance. Compare it to your original purchase price. If you’re approaching 80% of that original number, call your servicer and ask what their cancellation process requires.
If you bought two or more years ago and your local market has appreciated, ask specifically about current-value cancellation. It may cost you an appraisal. In most cases, that’s worth it.
If you want to run the numbers first, the Mortgage Payment Calculator with Amortization shows your schedule and when your balance is projected to reach 80% of the original loan amount. The Total Mortgage Payment Calculator can show you what your payment looks like with and without PMI, so you have a real number to work with.
The executive order is real. The PMI cancellation rules are already in place, and they have been for years. Don’t wait for a pilot program to make the first phone call.