The Quick Read: Of the insurance you carry on a home, private mortgage insurance is the one policy that can end. As of September 28, 2026, HousingWire reports that FHFA said Fannie Mae will align with Freddie Mac, so servicers may contact borrowers who may qualify to cancel it. Nothing cancels automatically. But with rates climbing and refinancing scarce, a premium that can come off is worth a look.
Here is the column in short form. I’ll walk through the dated facts, then give you my take and a practical checklist.
Key Takeaways
- Private mortgage insurance (PMI) is the one insurance on your housing bill that can end. Homeowners insurance stays as long as you own the home.
- FHFA’s announcement this month concerns servicer outreach. It does not cancel anything automatically.
- Eligibility, payment-history and valuation rules still apply until formal guidance changes them.
- Refinancing looks hard to justify while 30-year fixed rates remain elevated compared with recent years. Dropping PMI does not touch your first-mortgage rate.
- Owners who bought recently may have little equity to work with, so check your numbers before you act.
What Changed: The PMI Announcement
FHFA Director Bill Pulte said Fannie Mae will align with Freddie Mac’s policy. Servicers of government-sponsored-enterprise-backed loans may contact borrowers who may qualify to cancel PMI because values rose or balances fell. That is the HousingWire account, dated around September 15.
Two plain definitions first. A servicer is the company you send your payment to. PMI is the premium many buyers pay when they put down less than a full down payment on a conventional loan.
Now the fine print, because it matters. Homes.com reports the announcement came in a social-media post, not a formal guide update. It found no implementation date and no savings estimate. It also says it is unclear whether servicers would be required to reach out. FHFA pointed reporters back to the post.
WRE News makes the key distinction. This is about outreach, not automatic cancellation. Eligibility, payment-history and valuation rules still apply. The current Fannie guide still bars servicers from soliciting termination based on current value. So formal guidance is the thing to watch.
Fannie Mae itself already lets servicers contact borrowers approaching the automatic-termination threshold. Per an industry report from around the same date, it now looks forward to extending outreach to borrowers whose homes have appreciated. The scale is real: Yahoo Finance says around 800,000 borrowers used private mortgage insurance to buy homes last year.
One more item, with a caution. An industry trade group, citing the U.S. Mortgage Insurers, says the Working Families Tax Cuts Act restored the deduction for mortgage insurance premiums. That is an industry claim, and I’m not giving tax advice. Ask your tax professional.
Why Does Refinancing Look So Hard Right Now?
Because rates moved the wrong way, and fast. Freddie Mac’s survey put the 30-year fixed at 7.03% for the week of September 24, 2026, up from 6.95% the week before. A year earlier it was 6.30%, so the gap is 73 basis points. CNN called it the first reading above 7% since January 2025.
The weekly path tells the story. Freddie Mac’s releases show 6.71% for the week of September 3, 6.76% on September 10, 6.95% on September 17, and 7.03% on September 24. Each reading was higher than the one before, with the biggest jump, 19 basis points, in the middle.
Freddie’s number is a weekly average, so it lags. Mortgage News Daily’s daily index sits higher. CNBC reported the index at 7.45% on September 24, the highest since April 2024 and up 19 basis points in a day. Different methods, same direction.
The Fed added to the mood. The Federal Reserve’s statement on September 16 shows a 12-0 vote to raise the federal funds target range by 25 basis points, to 3-3/4 to 4 percent. Mortgage rates track long-term yields more than the Fed’s overnight rate, but the message was tighter money.
Borrowers noticed. The MBA’s weekly survey, released September 23 for the week ending September 18, showed the Refinance Index down 3% on the week and 62% below a year earlier. The 30-year contract rate on conforming balances rose to 7.12% from 6.97%. Purchase applications ran 11% below a year earlier on an unadjusted basis. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
The takeaway is simple. For most owners with a low first-mortgage rate, refinancing is a bad idea this fall. That leaves you hunting for other ways to cut housing costs.
What It Means for Homeowners With Equity
Equity is at a record, and that is the good news. Per MBA Newslink on August 11, ICE reported mortgage-holder equity hit a record $18 trillion in the second quarter. About $11.7 trillion of that is tappable, held by 47.5 million holders.
Equity is the raw material for dropping PMI. If your balance has fallen and your home’s value has risen, your loan-to-value position may have improved enough to matter. Whether it has is a question for your servicer and your loan’s rules.
Now the caution. The same ICE report shows a large number of borrowers are underwater, and that number has climbed sharply from a year earlier. They are concentrated among FHA and VA loans and buyers from 2022 through 2025. If you owe more than the home is worth, value-based cancellation is off the table. And July’s annual price growth was modest, with gains softening as rates rose.
So national numbers don’t tell you your own. Record total equity does not mean every owner can tap it or cancel anything. Some owners have a lot. Some have none.
Here is the other reason to look now. NAR’s report on September 10 showed August existing-home sales down 2.0% from July, at a 3.98 million annual rate. Inventory was 1.62 million, and supply stood at 4.9 months, which NAR calls the highest in over ten years. NAR’s snapshot puts the median price at $429,100, up 1.6% from a year earlier. Prices are flat-ish, not falling. Any equity you built through paydown is likely intact.
My Take
I think this announcement is more signal than substance, for now. Read the reporting: no date, no savings estimate, no confirmation that outreach is mandatory. A post is not a guide update.
But the direction is right. A borrower who pays a premium after the reason for it has faded is paying for nothing. Anything that gets a servicer to say “you may qualify to drop this” helps. I would rather see a required notice than an optional one. That’s my view, and the reporting doesn’t say which way it will go.
My bigger point is about timing. Two years ago the standard advice for a high-cost housing payment was “wait and refinance.” That advice is stale. With the 30-year above 7% per Freddie Mac, the smart owner looks at the items that don’t depend on the market. PMI is one. It has a rulebook, not a rate.
I’d also resist the urge to over-read the tax note. A restored deduction is not a reason to keep a premium you could remove. A deduction lowers the cost of a payment. Removing the payment lowers it more. Talk to your tax professional, but do the math on both.
Finally, a word about the stock reaction. Shares of the two housing-finance companies fell after the directive, per press reports. That is background. It tells you investors saw a cost to the companies, and it does not change what you should do with your own file.
What I’d Do Now
Start with a look at your last mortgage statement. Find out whether you pay a mortgage insurance line at all. Many owners never check.
Then work through these steps:
1. Confirm the loan type. Conventional PMI and government-loan mortgage insurance follow different rules. This announcement concerns loans backed by Fannie Mae and Freddie Mac.
2. Call your servicer. Ask what their process is for a cancellation request and what they need to see. Ask about valuation and payment-history requirements.
3. Get your own estimate of value. Recent sales near you are a start. A servicer may require its own valuation, and it decides what counts.
4. Gather your payment record. Servicers look at whether you’ve paid on time. Have your history ready.
5. Ask about borrower-initiated versus servicer-initiated cancellation. You don’t have to wait for a letter.
6. Watch for formal guidance. Until Fannie’s servicer guide changes, treat the announcement as a signal, not a right.
If you can’t cancel, that’s an answer too. Some borrowers will find that a refinance or a different structure is the only path, and I’d only look at that when the numbers clearly support it. Where you’re weighing a bigger move, the loan options page carries the current guidelines for the programs we place, subject to lender guidelines.
If you’re an owner who wants to use equity another way, I’ve written about using a HELOC to invest in real estate. Read it with the same caution: equity you tap is debt you owe.
On locks, a plain mechanic. If you do decide to refinance or buy, a rate lock holds a quoted rate for a set period. Quotes gathered on different days aren’t comparable, especially in a week when the daily index moved 19 basis points in a single session. If you like a quote and the deal is real, lock it. Floating is a bet, and this month it has lost.
If you’re weighing a purchase or a refinance this fall, Lendmire can walk you through how the current programs fit your file.
For the end-to-end picture of how these loans work — qualification, structures, and the full process — see Lendmire’s complete DSCR loans guide.
Frequently Asked Questions
Did Fannie Mae just cancel PMI for homeowners?
No. The announcement concerns servicer outreach, not automatic cancellation. Per WRE News, eligibility, payment-history and valuation rules still apply until formal guidance changes them. No implementation date has been published.
Can I cancel PMI because my home’s value went up?
Maybe. It depends on your servicer, your loan’s investor, and the valuation and payment-history rules that apply. The current Fannie guide still bars servicers from soliciting termination based on current value, so ask your servicer directly what it accepts.
Does this apply to FHA or VA loans?
The reporting concerns loans backed by Fannie Mae and Freddie Mac. Government-loan insurance follows its own rules. Check your loan type on your statement, then ask your servicer.
Should I refinance to get rid of mortgage insurance?
Rarely this fall. Freddie Mac’s survey put the 30-year fixed at 7.03% for the week of September 24, 2026. If your first-mortgage rate is well below that, trading it away to drop a premium usually costs more than it saves. Try cancellation first.
What if I owe more than my home is worth?
Then value-based cancellation isn’t available. ICE’s August report counts about 813,000 underwater borrowers. Keep paying on time and let paydown do its work, and revisit when your position changes.
About Lendmire
Lendmire (NMLS# 2371349) is a non-QM mortgage brokerage arranging DSCR investor loans in 41 markets — 40 states plus Washington, D.C. — and consumer mortgage programs, including bank statement, HELOC and down payment assistance options, in 16 states through wholesale lenders. Lendmire is the broker, never the lender; every file is underwritten by the lender under its own guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. HousingWire — FHFA, Fannie Mae, Freddie Mac servicer outreach on PMI cancellation
2. Homes.com News — Fannie Mae moves to help homeowners drop mortgage insurance sooner
3. WRE News — Fannie Mae PMI cancellation and proactive servicer outreach
4. Yahoo Finance — Pulte seeks easier mortgage insurance cancellation
5. Freddie Mac Primary Mortgage Market Survey
6. CNN — Mortgage rate tops 7 percent
7. CNBC — 30-year fixed mortgage rate spikes Thursday
8. Federal Reserve FOMC statement, September 16, 2026
9. MBA Weekly Applications Survey, September 23, 2026
10. MBA Newslink — ICE mortgage-holder equity hits record $18 trillion
11. NAR — August existing-home sales report
This article is part of Lendmire’s Mortgage News series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Homeownership and Hurricane Season: Essential Mortgage Advice to Secure and Protect Your Investment This July · Prepare For Buying a Home, Ways To Boost Your Credit Score! · Should I Get a Pool? Pros and Cons
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.