Guide
How to cancel PMI on an FHA loan
FHA loans use mortgage insurance premiums, not conventional PMI. Learn when annual MIP can end, how the June 2013 rule change works, and when a refinance is the realistic path.
FHA insurance is not conventional PMI
FHA loans charge an up front mortgage insurance premium and an annual premium, often called MIP. The Homeowners Protection Act does not cancel FHA MIP. The cancellation path depends on when the loan closed and the original loan to value.
Loans closed before June 3, 2013
Older FHA loans generally allow MIP cancellation once the unpaid principal reaches 78 percent of the original value and you are current. You usually need to request it. Keep proof of the original value from your HUD-1 or closing disclosure.
Loans closed on or after June 3, 2013
If the original loan to value was 90 percent or less, annual MIP is commonly scheduled for 11 years. If original loan to value was above 90 percent, annual MIP generally lasts for the life of the loan. In that case, an FHA streamline refinance to a lower loan to value, or a conventional refinance once you have equity, is often the way to stop paying MIP.
What to send your servicer
Ask the servicer in writing to confirm the MIP cancellation date, original loan to value, and whether a request is required. Include your loan number and a copy of your statement. If MIP cannot be cancelled, a recast after a lump sum can still lower the payment even though insurance remains.
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