The Quick Read: An FHA loan does not carry private mortgage insurance at all. It carries FHA’s own insurance, set by HUD. The September change covers only private mortgage insurance on Fannie Mae and Freddie Mac loans, so FHA borrowers get nothing from it. Conventional borrowers with PMI may start hearing from their servicers about cancellation. FHA borrowers will not.
Here is the short version. On September 15, 2026, HousingWire reported that FHFA Director Bill Pulte said Fannie Mae will align with Freddie Mac. Servicers may proactively contact borrowers who may qualify to cancel PMI.
Key Takeaways
- FHA insurance is HUD’s own premium. It is not private mortgage insurance, and the outreach change does not touch it.
- The change is about outreach. Eligibility, payment-history and valuation rules still apply.
- No implementation date and no savings estimate have been published.
- Rates moved up for four straight weeks in Freddie Mac’s survey, which trims the appeal of refinancing out of mortgage insurance.
- If you carry conventional PMI, check your own eligibility now. Don’t wait for a letter.
What Changed This Month
The policy shift is small on paper and useful in practice. Pulte’s framing, per HousingWire on September 15, was that the borrower “has to know to ask.” Under the alignment, servicers can be the ones to raise it, when a home’s value has risen or a balance has fallen.
Fannie Mae’s own statement, as relayed by market tracking, said it already lets servicers reach out to borrowers approaching the termination threshold. It now looks forward to extending that to borrowers whose homes have appreciated. The private mortgage insurance trade group USMI supports the alignment.
Now the limits. Homes.com reported that FHFA gave no implementation date and no estimate of homeowner savings. WRE News says the change concerns outreach only, and that formal guidance is still pending. One secondary outlet claims Fannie issued a lender letter the next day. I couldn’t confirm that on Fannie Mae’s own site, so I’m leaving it out.
Nobody has told us how many borrowers will actually qualify. Neither have I seen a date. Treat the announcement as direction, not a switch that has been flipped.
Wait, Does an FHA Loan Require PMI?
No. FHA loans carry a mortgage insurance premium, and HUD administers it. PMI is private insurance sold on conventional loans. FHA’s insurance is a government program. The two get lumped together in casual talk.
HUD’s mortgage insurance page says cancellation rules for FHA turn on the case-number date, with June 3, 2013 as the dividing line. Removal depends on the loan’s case-number date and its original terms. It does not depend on how much your home has appreciated.
That is why September’s news skips FHA borrowers entirely. Fannie and Freddie outreach covers private mortgage insurance on their own conventional loans. I found no September 2026 HUD or FHA policy change on this. Absence in my search isn’t proof, but I’d say it’s a fair read.
A quick comparison:
| Factor | FHA insurance | Conventional PMI |
|---|---|---|
| Who sets the rules | HUD | Private insurers, GSE rules |
| Cancellation basis | Case-number date, original terms | Equity, payment history, value |
| September outreach change | Does not apply | May apply |
| Where to check | HUD’s MIP page | Your servicer |
What It Means for Home Buyers
If you’re buying with a small down payment, this change shapes the long game, not the closing table. Nothing about the outreach rule alters what you pay on day one. It affects how likely you are to get out of mortgage insurance later, and how much friction you face doing it.
On the conventional side, the path out runs through equity. Prices help. NAR’s report on August existing-home sales, released September 10, 2026, put the median price at $429,100, up 1.6% from a year earlier. That was the 38th straight month of year-over-year gains. Rising values are what make a current-value cancellation request plausible.
On the FHA side, appreciation doesn’t change the rule. Your removal path depends on when the loan started and how it was structured. If you want out of FHA insurance early, the usual route is a refinance into a different loan, and that is where rates bite.
Buyers with little down are a big slice of the market. HousingWire, on the same September 10 data, put first-time buyers at 30% of August sales. The MBA’s weekly survey, released September 23, 2026, showed FHA at 16.7% of applications for the week ending September 18, down from 16.9%.
Why the Rate Backdrop Matters Here
Higher rates make cancellation the main lever, because refinancing stops paying for itself. If you hold conventional PMI and your mortgage rate is below today’s market, a refinance to drop the insurance costs you more than it saves. Cancellation is the cleaner path.
Here are the dated figures, each with its publisher. Freddie Mac’s survey put the 30-year fixed average at 7.03% for the week of September 24, 2026, up from 6.95% the week before. That is 8 basis points. A year earlier it was 6.30%. The survey had averaged 6.71% on September 3, up 5 basis points on the week. Read the sequence and you get four straight weekly increases. I haven’t pulled the September 17 release myself, so I’m leaning on the sequence in the surrounding releases.
Freddie’s number lags the market. Mortgage News Daily’s index reached 7.50% on September 28, 2026, its first time there since April 30, 2024. MND lists strong data, Treasury supply-and-demand issues and heavy bond supply as drivers, and says oil explains little of the recent rise. Two sources, two levels, different days. Don’t compare them as if they were one number.
The Fed added to the mood. On September 16, 2026, the FOMC raised its target range by 25 basis points to 3-3/4 to 4 percent, the first hike since 2023. That doesn’t set your mortgage rate directly. Mortgage rates track long-term yields and mortgage bonds. But the direction is clear enough.
The MBA’s contract rate for the week ending September 18 rose 15 basis points. Refinance applications fell 3% that week and stood 62% below a year earlier. Nobody is refinancing for fun.
My Take
The outreach change is good policy with a modest payoff. Here’s my read, stated as opinion. Borrowers who overpay for insurance they no longer need are paying for a lack of information. A servicer letter fixes that at almost no cost. I like it.
I’d keep expectations low, though. The rules for eligibility, payment history and valuation haven’t changed. A borrower who doesn’t qualify on Monday still won’t qualify on Tuesday because a letter arrived. And with no implementation date, this is a promise more than a program.
The bigger point is the FHA misreading. A lot of buyers still hear “PMI” and assume it’s one thing. It isn’t. Someone choosing between FHA and conventional with a small down payment is choosing between two different insurance structures with different exit routes. The choice is worth making deliberately.
My honest hesitation: this is a genuine toss-up for many buyers. FHA can be the door that opens when other doors are shut. The exit route is harder. I’d never tell a buyer to skip FHA just because of the insurance. I’d tell them to know the exit before they walk in.
What I’d Do Now
Start with your own file, not the headline. Practical steps, none of them advice to buy or sell anything:
- Know your loan type. Look at your closing paperwork. Is it FHA or conventional? That one fact decides which rules apply to you.
- If you have conventional PMI, call your servicer and ask what documentation a current-value cancellation would need. Ask whether they’d order a valuation, and who pays for it. Don’t wait for the outreach letter.
- If you have FHA, look at HUD’s page and your case-number date. That tells you what removal looks like. Plan around it rather than around a headline about someone else’s insurance.
- If you’re shopping, compare loan structures by their exit routes as well as the entry terms. Our loan options page carries the current guidelines for the programs we broker, subject to lender guidelines.
- If you like a quote, lock it. A rate lock holds a quoted rate for a set window. Quotes gathered on different days aren’t comparable, especially in a month like this one, when the daily index and the weekly survey sit well apart.
Investors face a different question. Buying that leans on rental income runs on a different set of tests than owner-occupant insurance rules. If that is your lane, my piece on STR DSCR versus a conventional loan for a business covers the trade-offs. RealtyWire’s write-up of the August NAR data, which I haven’t checked against NAR’s own release, has investor and second-home buyers at 15% of sales, against 21% in August 2025.
Is the Market Helping or Hurting Buyers Right Now?
Hurting, on rates, and mixed on prices. NAR’s September 10, 2026 report has August existing-home sales down 2.0% from July to a 3.98 million annual rate, and down 1.2% from a year earlier. Inventory was 1.62 million homes, a 4.9-month supply. HousingWire adds that sales dipped below 4 million for the first time since June 2025. NAR’s Yun said rates and sales move in opposite directions.
Purchase demand is soft too. The MBA’s seasonally adjusted purchase index fell 1% for the week ending September 18. The unadjusted index was 11% below a year earlier.
Rising prices with falling sales is an odd pairing. It suggests sellers aren’t cutting and buyers are stepping back. For a small-down-payment buyer that cuts both ways: home values keep building equity, but the entry price is high and the borrowing cost has climbed.
For the end-to-end picture of how DSCR loans work — qualification, structures, and the full process — see Lendmire’s complete DSCR loans guide.
Frequently Asked Questions
Does an FHA loan require PMI?
No. An FHA loan carries HUD’s own mortgage insurance premium, not private mortgage insurance. The two work differently, especially on cancellation. HUD’s page ties removal to the case-number date and the loan’s original terms.
Does September’s Fannie Mae change help FHA borrowers?
No. The change covers private mortgage insurance on Fannie- and Freddie-backed conventional loans. I found no September 2026 HUD or FHA policy change. My search isn’t proof there is none, so check HUD directly.
Will servicers now cancel my PMI automatically?
No. The change is about outreach. A servicer may contact you, but eligibility, payment-history and valuation rules still apply. FHFA gave no implementation date, so you may not see a letter for a while.
Should I refinance to get rid of mortgage insurance?
It depends on your existing rate against today’s market. With the 30-year average up four straight weeks in Freddie Mac’s survey and refinance applications 62% below a year earlier, many borrowers find cancellation the cleaner route on a conventional loan. FHA holders should check HUD’s rules first. Lender guidelines apply either way.
Are FHA loans still popular?
The MBA’s September 23, 2026 release shows FHA at 16.7% of applications for the week ending September 18, slipping from 16.9%. That’s a small move on one week of data, not a trend.
If you’re weighing a purchase or a refinance this fall, Lendmire can walk you through how the current programs fit your file.
Fall is a season of higher borrowing costs and stubborn prices, and the buyers who do best usually know their exit from mortgage insurance before they sign.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage brokerage whose founder writes this column. DSCR investor programs reach 41 markets, including Washington, D.C.; consumer programs such as bank statement, HELOC and down payment assistance loans are arranged in 16 states; every loan is placed with, and underwritten by, a wholesale lender under that lender’s guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. HousingWire: FHFA, Fannie Mae and 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. HUD: FHA mortgage insurance premiums
5. NAR: August existing-home sales
6. MBA Weekly Applications Survey, September 23, 2026
7. Freddie Mac Primary Mortgage Market Survey
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: How Much Do You Need as a Down Payment on a House? · What is an FHA Loan and How Can It Benefit You? · DSCR Loan After Foreclosure: Can You Qualify?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Compliance and disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage broker and is not a direct lender, depository institution, financial advisor, or tax professional. Content in this article is general market analysis and educational information — not financial, legal, or tax advice for any specific situation. Lendmire does not guarantee loan approval; every transaction is subject to underwriting by the funding lender. Mortgage pricing and loan program guidelines are subject to change at any time without notice and vary by borrower characteristics, property type, and state regulations. Lendmire complies with Equal Housing Opportunity. Licensure verification: NMLS Consumer Access.