FHFA moves to expand mortgage insurance outreach
Fannie Mae will allow mortgage companies to notify borrowers who may qualify to cancel private mortgage insurance, potentially lowering their monthly payments.
Homeowners who qualify to drop private mortgage insurance could soon hear from their mortgage company about the potential savings under a policy change announced by the Federal Housing Finance Agency.
FHFA Director Bill Pulte said Fannie Mae will follow Freddie Mac’s policy allowing mortgage companies to contact borrowers whose rising home values or lower loan balances may make them eligible to cancel the coverage, HousingWire reported.
Previously, Fannie Mae restricted that outreach, leaving borrowers to ask about cancellation themselves.
“If your home is worth more, or you have paid the loan down far enough, you should be able to drop EXTRA Mortgage Insurance,” Pulte wrote in an X social media post.
Buyers who put down less than 20% on a conventional loan typically pay private mortgage insurance, or PMI. That added expense can end once they qualify to have the coverage removed.
The National Association of Realtors® welcomed the announcement.
“This change will put more money in some homeowners’ pockets,” Shannon McGahn, NAR’s executive vice president and chief advocacy officer, said in a statement.
McGahn said those savings could help homeowners reduce debt, make improvements, build savings or prepare for another home purchase.
The outreach change does not mean coverage will end automatically when a home gains value. Borrowers still must qualify, and the process may carry an upfront cost.
Todd Bitter, national director of sales at NEXA Lending, told HousingWire that loan terms commonly call for 24 months of on-time payments before borrowers can seek removal based on a new appraisal.
“Then, they have to pay for this appraisal. It varies by market, but anywhere from $500 to $700 is typically the cost,” Bitter said.
For qualifying borrowers, he said, the monthly savings can outweigh that expense over the remaining life of the loan.
U.S. Mortgage Insurers also supported allowing servicers to initiate those conversations, according to HousingWire.
© 2026 Florida Realtors®