FHA Loan Mortgage Insurance Removal Rules by Loan Start Date

The Quick Read: Whether your FHA mortgage insurance can come off depends on two things: the date your loan’s FHA case number was assigned, and your loan-to-value ratio when the loan started. Loans with case numbers before June 3, 2013 can have the insurance cancel automatically, under conditions. Newer loans with a low down payment usually carry it for the whole term. Newer loans that started at 90% LTV or less carry it for 11 years.

Why Do the Rules Depend on a Start Date?

The insurance rules changed in the middle of the program’s history, and each loan keeps the rules it started under. Conventional private mortgage insurance (PMI) comes off at set equity levels. FHA mortgage insurance does not work that way. It follows a schedule fixed when your loan began.

That is why two neighbors with similar FHA loans can get different answers. One bought before the rule change and one after. Same program, different clock.

The details matter because FHA is built for buyers with little down. Across the FHA loan programs Lendmire arranges through wholesale lenders, a buyer can finance up to 96.5% of the home with a 3.5% minimum investment at a decision score of 580 or higher, subject to lender guidelines and full file review. That sits in the highest LTV bucket. For a buyer starting today, the practical question is not “when does it fall off?” but “what is my exit?”

How Does FHA Mortgage Insurance Work?

An FHA loan carries two premiums. The upfront premium is 1.75% of the base loan, and most borrowers finance it into the balance. The annual premium is billed monthly. It ranges from 0.15% to 0.75% of the balance, depending on loan term, loan amount and LTV.

The upfront piece is a one-time charge and does not “come off.” Removal rules only concern the annual, monthly piece. That distinction trips up many borrowers who go looking for a way to cancel the whole thing.

One more term: FHA calls this mortgage insurance premium, or MIP. People say “FHA PMI,” but PMI is the private version on conventional loans. Different product, different rules.

Which Date Counts, and Where Do You Find It?

The date that counts is the day your FHA case number was assigned. This is the loan’s identifier in the government’s system. It is usually assigned shortly after the lender orders your appraisal, which can be weeks before closing.

Find it in these places:

1. The appraisal report, where the case number is printed.

2. Your closing documents.

3. Your servicer’s records or a call to the servicer.

Write down three things: the case number date, the closing date and the original loan term. Then find your original LTV. For loans after the rule change, that is the base loan amount divided by the lesser of the sales price or appraised value, measured at origination. A 3.5% down purchase starts at 96.5% LTV. That puts it above 90%, in the loan-term bucket. That reading is a straightforward application of the tiers, not a separate rule. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.

Removal Rules by Loan Start Date

Here is the core lookup. Find your row, then read the conditions below the table. These rules come from HUD, the agency that runs FHA. I cite each one to its source in the sections that follow.

Loans with a case number on or after June 3, 2013

HUD’s Mortgagee Letter 2013-04 ended automatic cancellation for new loans. It also removed the old exemption for short-term, low-LTV loans. The result is a two-bucket rule that HUD’s loan-level lookup tool confirms. If LTV at origination was 90% or less, monthly MIP is paid for 11 years. If it was above 90%, monthly MIP is paid for the loan term.

That “90% or less” is HUD’s wording. Some sites call it a “10% down rule.” It is close, but the real test is LTV at origination. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.

Later premium-rate updates lowered the annual rates, per HUD’s published notices. They did not change the 11-year and loan-term split. Cheaper does not mean shorter.

Loans with a case number before June 3, 2013, closed in 2001 or later

These loans can have automatic cancellation. HUD’s Handbook 4000.1 servicing section sets it out, and the HUD FHA Q&A page repeats the same tiers. The conditions turn on term and LTV:

• Term over 15 years: MIP cancels when the balance reaches 78% of the lesser of the original sales price or appraised value. You must also have paid MIP for at least five years.
• Term of 15 years or less, LTV above 90%, case number July 14, 2008 or later: MIP cancels at 78%, with no five-year minimum.
• Term of 15 years or less, LTV 90% or greater, closed in 2001 or later, case number before July 14, 2008: MIP cancels at 78%, with no minimum period.
• Term of 15 years or less, LTV between 78% and 90%: HUD’s Q&A page lists a separate tier here. Check the exact wording with your servicer before you count on a date. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.

The LTV in these calculations excludes the financed upfront premium. HUD also counts the 78% down using your original amortization schedule. It does not use a new appraisal. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.

Cancellation is for borrowers in good standing. Ask your servicer exactly how it defines that for your loan.

Loans closed before 2001

The handbook’s automatic-cancellation language covers loans closed on or after January 1, 2001. If your loan closed earlier, expect that the insurance does not cancel on its own. Ask your servicer what applies.

What Does Not Remove FHA Mortgage Insurance?

Several popular ideas do not work on a newer, high-LTV loan. Here is the myth beside the reality.

Equity gained after closing does not change the duration. HUD’s handbook ties cancellation to the original value and the original schedule. So a hot market does not help here.

The federal law that gives borrowers PMI cancellation rights is a separate matter. The Consumer Financial Protection Bureau describes those rights for private mortgage insurance on single-family primary residences, and it points FHA questions elsewhere. Do not borrow PMI logic for an FHA loan.

An FHA Streamline refinance does not remove MIP either. The premium continues.

Ways Out When the Rules Say No

For a post-2013 loan above 90% LTV, leaving FHA is the main exit. Each route resets or removes different things. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.

A few mechanics matter here.

A new FHA loan starts its own schedule. It is judged on its own case number date and its own LTV. In the programs Lendmire places, an FHA rate-and-term refinance can reach 97.75% LTV on a principal residence you have occupied for the previous twelve months. That is above 90%, so the new loan runs the loan term. An FHA cash-out reaches 80% LTV on a home owned and occupied for 12 months before the case number. That is below 90%, so by the tier rules it falls in the 11-year bucket. That placement is an inference from HUD’s tiers, so confirm it on your specific file. Lendmire’s piece Cash-Out Refinance Mortgage Insurance Rules When Leaving FHA covers that exit in more depth. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.

A non-FHA refinance shifts the question to PMI. Conventional lenders commonly want about 20% equity to skip PMI. That is common underwriting practice, not an FHA rule, and it varies by lender and program. You also have to qualify on credit, income and current appraised value, and you pay closing costs again.

Pay off or sell. When the FHA loan ends, its MIP ends with it. That sounds obvious. It is also the answer for people who plan to move before the 11-year or full-term mark anyway.

Is Refinancing Worth It? A Break-Even Method

Skip the rate talk and use the structure. You are trading one cost for another, and the question is how long it takes to come out ahead.

Break-even months = total cost of the new loan ÷ monthly savings.

Total cost means the closing costs and any PMI you would then carry. Monthly savings means your current MIP charge, minus any new insurance, plus or minus the change in your principal and interest. Get real numbers from a Loan Estimate, then divide.

If you plan to hold the home past the break-even point, the refinance can make sense. If you might sell sooner, it often does not. That one question settles many files.

Also compare terms, not just payments. Stretching a loan back to a new 30-year term can lower the monthly bill while raising total interest. Lower monthly cost is not the same as lower total cost. Run both.

What Lendmire Sees in Real Files

On the FHA files Lendmire arranges, the most common surprise is not the rule itself. It is that buyers assumed it worked like PMI and planned around a removal date that was never coming. Buyers who learn the 90% LTV line before they buy sometimes reshape the purchase around it, putting more down or adjusting the price range. Others accept the insurance as the price of a low down payment and plan a refinance exit. Both are reasonable. The costly version is finding out five years in. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.

That is the decision in practice. At purchase, your down payment sets the bucket. After purchase, the bucket is fixed, and your choices are to wait, refinance, sell or pay off.

How to Confirm Your Insurance Actually Stopped

Cancellation on eligible older loans is supposed to be automatic once conditions are met. Check anyway.

1. Pull the case number date, closing date, term and original value from your records.

2. Run the loan through HUD’s lookup tool to see your projected final MIP payment date.

3. Compare that date to your servicer’s statement and escrow analysis.

4. When the date passes, confirm the monthly charge is gone and your escrow dropped.

5. If it did not, contact the servicer in writing with your case number, the rule you rely on and the date.

Servicer transfers can muddy the record. Keep your own copy of the original appraisal and closing documents so you can show the dates.

Rule Changes: Proposed, Not Law

Congress has seen proposals, such as the Mortgage Insurance Freedom Act, that would let FHA borrowers cancel at 78% LTV regardless of start date. Such proposals are not law. Verify current status on congress.gov before you plan around it. Do not delay a decision on the hope of a bill passing. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.

Common Mistakes

• Using the closing date instead of the case number date.
• Counting equity from a new appraisal or from extra payments.
• Assuming a Streamline refinance removes the insurance.
• Refinancing without a break-even check.
• Never checking the statement after a supposed cancellation.

One more edge case: loans on Hawaiian Home Lands under Section 247 are not assessed annual MIP, per a HUD mortgagee letter attachment. Rare, but real.

If you are wondering about a second home or rental, the answer is short. FHA is for owner-occupied principal residences only, so occupancy decides the loan.

Key Terms Defined

Case number: The identifier HUD assigns to an FHA loan, usually when the appraisal is ordered. Its date sets your removal rules.

Mortgage insurance premium (MIP): FHA’s insurance charge, made of an upfront piece and an annual piece billed monthly.

Loan-to-value (LTV): Your loan balance divided by the home’s value, expressed as a percentage. Original LTV decides how long MIP lasts on newer loans.

Amortization schedule: The payment plan that shows how your balance falls over the term. HUD counts older cancellation dates using the original one.

Streamline refinance: An FHA-to-FHA refinance with limited review. It does not remove MIP.

Where to Go From Here

Find your case number date, your original LTV and your term. Match them to the table. Then decide whether waiting, refinancing or planning a sale fits your timeline.

If you are buying a home and want to see whether an FHA loan fits your file, Lendmire can help you compare the options and what each one asks of the file.

For your own numbers, request a scenario review with Lendmire.

About Lendmire

Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. HUD Mortgagee Letter 2013-04 (hosted by FHFA)

2. HUD SFH loan-level lookup, MIP final payment date

3. HUD Handbook 4000.1 (servicing excerpt, hud.gov)

4. HUD FHA Q&A: How long is MIP collected (case number before 6/3/2013)

5. Consumer Financial Protection Bureau: When can I remove PMI

6. HUD mortgagee letter attachment