The Quick Read: You can often get PMI off a condo loan before the automatic date, but only if you ask for it. Pricing and available terms vary by lender, borrower profile, property type, and full underwriting review. A condo follows the same cancellation tests as a house. The difference is the valuation, because the unit needs its own current-value opinion if you are relying on appreciation. Everything below is subject to lender guidelines and full file review.
That is the short version. The rest of this page covers the mechanics, the two value bases, the condo-specific friction, and where the general rule breaks. For context, Lendmire is a mortgage broker that arranges conventional loan programs through wholesale lenders, so the notes here come from watching how these requests play out on files, not from a rulebook alone.
Refinance savings and break-even estimate
The starting figures are an example value with a balance in proportion and a placeholder for costs. Replace them with yours, and enter the current rate from your statement.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a refinance quote.
Illustrative starting assumptions: a $350,000 home value, a $245,000 current balance, a current rate you enter and a remaining term seeded at twenty-five years, closing costs seeded at $5,000 as an editable placeholder (not a fee quote) and rolled into the new loan, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical national rates. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The new rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a refinance quote; a refinance is priced by the lender at lock, and the current rate, the remaining term and the closing costs are figures you enter. The current payment is estimated from the balance, the current rate and the remaining term; the break-even divides the closing costs by the monthly saving and ignores the interest effect of a longer term. On the VA IRRRL the funding fee is added to the loan unless the veteran is exempt. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages; Lendmire is a broker, never the lender.
What PMI Is and Why It Can Come Off
PMI is mortgage insurance on a conventional loan. It is required when the loan starts above 80% loan-to-value. It protects the lender, not you, and it is built to be temporary. Across the wholesale programs Lendmire places files with, a purchase can start at 97% leverage for a first-time buyer on a one-unit primary residence, or 95% for a standard purchase. Both land in PMI territory, so the cancellation path matters from day one. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
There is no condo-specific PMI rule at the federal level or in the Fannie Mae and Freddie Mac guides. A one-unit condo used as a primary residence or second home runs through the same tests as a single-family house. What changes is the paperwork around value.
Key Terms Defined
PMI (private mortgage insurance): Insurance on a conventional loan with less than 20% equity (a loan-to-value above 80%), which protects the lender if you default.
LTV (loan-to-value): Your loan balance divided by the home's value, shown as a percentage.
Original value: The lower of the purchase price or the original appraisal, the number the federal cancellation test uses.
Current value: What the unit is worth now, supported by a new appraisal or broker price opinion.
Servicer: The company that collects your payment and handles your PMI request. It may not be the lender who made the loan.
BPO (broker price opinion): A lower-cost valuation by a real estate professional, sometimes accepted in place of a full appraisal.
The Three Numbers That Matter: 80, 78, and Midpoint
The CFPB explains that you can ask the servicer to cancel PMI on the date your balance is scheduled to fall to 80% of the home's original value. You can ask earlier if extra payments bring the balance to 80% of original value. The request needs to be in writing, and you need to:
- Be current with a good payment history.
- Certify there are no junior liens.
- Show evidence, such as an appraisal, that the value has not fallen below the original value.
Automatic termination is a separate trigger. Per HelpWithMyBank.gov, PMI must be cancelled automatically at 78% of original value on the original amortization schedule, or at the midpoint of the amortization period, if you are current. One more detail: the federal rules the CFPB describes apply to single-family principal residences that closed on or after July 29, 1999. Some servicers apply their own standards beyond that.
So the 80% mark is a right to ask. The 78% mark is automatic. Nobody gets PMI dropped at 80% without a request.
How the Request Works, Step by Step
On most condo files, the request moves through the same sequence. Skip a step and the servicer sends it back.
1. Identify the PMI type and who owns the loan. Only borrower-paid PMI is cancellable on request. Lender-paid mortgage insurance generally is not. Your servicer can tell you whether Fannie Mae or Freddie Mac owns the loan. The PMI disclosure from closing shows the first date you can ask.
2. Pick the value basis. Original value is the purchase price or original appraisal. Current value is a new opinion, used when appreciation or renovation has lowered your LTV.
3. Clear the gating tests. The loan must be current. The payment history must be clean. There can be no junior liens. The value cannot have declined.
4. Order the valuation if you are using current value. The borrower pays, and the servicer orders it only after receiving the fee. Fannie Mae's servicing guide says this directly.
5. Submit the written request. Put it in writing even though some investors allow verbal requests. A written request leaves a record.
6. Get the decision. The servicer evaluates the request against the guide tests. If it denies the request, it owes you written reasons.
7. Confirm the premium stopped. Check the next statement. Servicers have to finalize and report the termination, and a missed step here keeps premiums running.
What decides the outcome: the LTV against the correct value basis, loan age, payment history, junior liens, whether the valuation supports the value, and the occupancy and property type.
Original Value vs. Current Value
Most failed requests come from mixing these two up. A homeowner sees prices rising and assumes PMI must come off. Federal law keys to the original value. Current-value cancellation is an investor program with its own LTV, seasoning, and appraisal rules.
| Factor | Original value | Current value |
|---|---|---|
| Based on | Purchase price or original appraisal | New valuation of the unit |
| New valuation needed | Usually no | Yes |
| Seasoning | No minimum seasoning | Set by the investor |
| Borrower cost | Typically none | Valuation fee |
| Best fit | Paydown has reached the mark | Appreciation or improvements |
Freddie Mac's Guide Section 8203.2 sets the investor test on current value. The LTV must be 75% or less if the loan is seasoned between two and five years, and 80% or less if it is seasoned more than five years. On original-value requests, the servicer warrants that the original value supports the required LTV. The payment history must show no payment 30 or more days late in the preceding 12 months and none 60 or more days late in the preceding 24.
Note the look-back structure. A single late payment from four years ago does not kill the request. The test is a window, not a lifetime record. Fannie Mae counts you as current if the payment due in the month before the scheduled termination date was paid by the end of the month it was due. Fannie Mae's current-value tests should be confirmed against its live Servicing Guide B-8.1-04 section, since investor thresholds get revised.
Where the Condo Actually Changes Things
Three places: the valuation, the project, and the improvements.
The valuation
For a condo, the opinion should be of the unit, using condo comparable sales. That is general appraisal practice rather than a published PMI rule. On Freddie Mac loans outside the HPA rules, the BPO must be an interior and exterior opinion, and the servicer can require a full appraisal instead.
Here is where condo files get tight. If the building has had litigation, a special assessment, or weak financials, unit comps can drag the value down. That is an inference from how appraisals work, not a rule. But a condo with a problem building can come in under the value you expected, and the request fails on the LTV test even though your principal balance is fine.
The project
Project eligibility does not govern a cancellation request. It governs the refinance route. Fannie Mae treats loans in projects with an "Unavailable" status in its Condo Project Manager tool as ineligible for delivery. Project status is lender-only information. There is no public master list, so you often learn it only when a refinance application hits review.
Improvements
Freddie Mac waives the two-year seasoning for substantial improvements, at 80% LTV. The guide requires the BPO or appraisal to state the nature, extent, and cost of the improvements and their effect on value. For a condo owner, the improvement has to be your own, documented work: a kitchen, a bath, a flooring replacement. Association-funded building work and special assessments are not clearly your improvements, so do not assume they count. Routine maintenance does not count either, and servicers are cautioned against ordering valuations on unseasoned loans built on it. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
HOA dues and special assessments do not change when PMI ends. Removing PMI frees up cash, but those costs stay put.
Where the General Rule Breaks
The 80% and 78% tests are the baseline. These cases move the line.
Investment condos and 2-4 unit primaries. The thresholds are stricter. Per one MI insurer's summary of the agency rules, original-value requests on these property types run at 70% for Fannie Mae and 65% for Freddie Mac. Verify against the guides before relying on it. A one-unit condo bought as a primary residence or second home sits in the standard bucket. The leverage limits on purchase reflect the same split: Fannie Mae and Freddie Mac allow second homes to 90% and one-unit investment property to 85%, so the occupancy story shapes the whole file.
Second homes. Ask your servicer in writing which standard it uses.
Non-HPA loans. Freddie Mac's Section 8203.3 sets a tighter current-value test for loans outside the HPA: 65% or less if seasoned at least two years.
Modified loans and disaster-impacted borrowers. Both agencies carry separate payment-record rules. If either applies to you, the standard look-back may not be the one that governs.
FHA loans. FHA mortgage insurance is not PMI. It follows different rules, though Fannie Mae's servicing guide has a quirk where a borrower request to cancel FHA MIP is evaluated under the conventional current-value provisions. Do not apply the conventional steps above to an FHA loan without checking.
Lender-paid MI. Generally cannot be cancelled by the borrower. The premium is built into the loan terms.
Cancel or Refinance?
A refinance is the other exit. It replaces the loan, and PMI goes away if the new loan is at 80% LTV or below. The trade-off is plain: a refinance resets the loan, and the condo has to pass project review unless a waiver applies. Exact terms depend on the lender's guidelines, property type, leverage, and a full review of the borrower's file.
Fannie Mae's high-LTV refinance option waives project review, except for confirming the project is not a hotel, motel, houseboat, timeshare, or segmented-ownership project. Whether that helps depends on the eligibility criteria. Across the wholesale programs Lendmire works with, a rate-and-term refinance on a one-unit primary residence reaches 95% LTV, with mortgage insurance above 80%. So a refinance only removes PMI if the new balance lands at 80% or lower. A cash-out refinance on a one-unit primary caps at 80%, which means it can land exactly at the no-PMI line, with seasoning requirements on the loan being paid off. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Here is how that decision tends to run. Say you own a one-unit condo that has appreciated, and your loan is two and a half years old. A current-value request is possible if the LTV test is met on a unit valuation. If the building has a project problem, the valuation may come in light, and a refinance would also hit project review. The cancellation route is cheaper but exposed to the appraisal. The refinance route is more expensive and exposed to the project. Neither is free of risk. Honestly, for many owners the first move is a call to the servicer asking which value basis it will accept, before anyone orders anything.
Lendmire's related piece Do Extra Principal Payments Remove PMI Sooner on a Conventional Loan? covers how paydown can pull the original-value date forward. For a deeper look at the owner side, see Lendmire's guide Conventional Loan PMI Cancellation Rules for a Condo Owner.
The Payoff: Is It Worth the Appraisal?
Ending PMI reduces your monthly cost, and it lowers the obligation counted in future debt-to-income ratios. That is the general logic. The saving depends on your loan.
The break-even is simple. Compare the valuation fee against the PMI you stop paying each month. If you are only a few months from the automatic date, the fee may not be worth it. If you are years away and the unit has appreciated, it often is. Published typical annual PMI premiums run from 0.58% to 1.86% of the balance, a range and not a quote. Your actual premium is on your statement.
Questions to Ask Your Servicer
Most condo requests go sideways because the borrower never asked these before paying for a valuation.
- Does Fannie Mae or Freddie Mac own the loan?
- Which value basis will you accept: original or current?
- Do you require a full appraisal or accept a BPO?
- Do you choose the appraiser, or can I?
- What seasoning and LTV tests apply to my occupancy type?
- Will you give the denial reasons in writing if the request fails?
Documents to have ready: the written request, a payment history showing the look-back window is clean, a statement that there are no junior liens, and for improvements, receipts and permits.
If the Request Is Denied or the Value Comes Up Short
A denial is a data point, not a dead end. Common next steps:
- Keep making extra principal payments and re-request when the original-value mark is reached.
- Wait for more seasoning if the denial was on loan age.
- Re-request with a stronger valuation package, including documented improvements.
- Run a refinance comparison if the building is project-eligible.
Missing the mark by a small margin usually means a small paydown closes the gap. A bigger miss points to waiting or refinancing.
Frequently Asked Questions
Do condos have different PMI removal rules than houses?
No. A one-unit condo used as a primary residence or second home follows the same cancellation tests as a single-family house. The practical differences are the unit-level valuation and, if you refinance, the building's project eligibility.
Does my PMI come off automatically when I hit 80%?
No. At 80% of original value you can request cancellation in writing. The servicer must end it automatically at 78% of original value on the original schedule, or at the loan's midpoint, as long as you are current.
Can I remove PMI because my condo went up in value?
Sometimes. Federal law keys to original value, but Fannie Mae and Freddie Mac allow current-value requests with their own LTV and seasoning tests. Freddie Mac, for example, uses 75% for loans seasoned two to five years and 80% beyond five years. A new valuation is required, and you pay for it.
Does one late payment ruin my request?
Not necessarily. The test is a look-back window. For Freddie Mac, no payment can be 30 or more days late in the past 12 months, and none 60 or more days late in the past 24.
Does an appraisal alone cancel PMI?
No. The appraisal supports the request, but the servicer still evaluates the loan against the guide tests, including payment history and junior liens. Check which valuation your servicer accepts before paying.
If you are weighing a refinance and want the break-even run on your own numbers, Lendmire can help you compare the programs on the same home.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving homeowners and home buyers in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending channels; Lendmire brokers the financing and the lender underwrites each application. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. CFPB – When can I remove PMI?
2. HelpWithMyBank.gov – PMI removal
3. Fannie Mae Servicing Guide F-1-02
4. Freddie Mac Guide Section 8203.2
5. Fannie Mae Selling Guide B4-2.2-02 (Full Review, CPM)
6. Freddie Mac Guide Section 8203.3
7. Fannie Mae Selling Guide B5-7-01
This article is part of Lendmire’s conventional loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Conventional Loan Requirements for a Condo With a Low Down Payment · Conventional Loan PMI Cancellation Rules for a Condo Owner · Can a Repeat Buyer Use Homeready for a Conventional Loan on a Condo?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.