PMI cancellation isn't a favor your lender does for you. It's a legal right, written into a federal law most homeowners have never heard of: the Homeowners Protection Act of 1998, often called the HPA or the PMI Cancellation Act.
Knowing what this law guarantees changes the conversation with your servicer. You're not asking permission — you're invoking a right.
What the HPA Covers
The HPA applies to private mortgage insurance on most conventional residential mortgages. It does not govern FHA mortgage insurance (MIP), which follows separate rules. For conventional borrowers, the HPA sets out three core protections.
1. Borrower-Requested Cancellation at 80%
You have the right to request that PMI be canceled once your loan-to-value ratio reaches 80%. Under the HPA itself, that 80% is measured against your home's original value — the lesser of the purchase price and the original appraised value. The servicer can require that you be current on payments, have a good payment history, and may ask for evidence that the home's value hasn't declined. If you've appreciated your way to 80%, a separate set of rules — covered next — is what lets you use today's value.
The 80% line
PMI can be requested below 80% LTV.
Below 80%
You can request PMI cancelation in writing.
At 78% (scheduled)
By law, your servicer must remove PMI.
2. Automatic Termination at 78%
The servicer must automatically cancel PMI when your balance is scheduled to reach 78% of the original value, based on the amortization schedule, provided you're current on payments. No request is required — but this trigger ignores appreciation entirely.
3. Midpoint Termination
If neither threshold is reached sooner, PMI must end at the midpoint of the loan term — year 16 of a 30-year loan — as long as you're current on payments.
Where Current Value Comes In: The Fannie Mae & Freddie Mac Rules
Here's the nuance most articles skip. The HPA's borrower-requested cancellation is keyed to your original value. The ability to cancel based on your home's appreciated current value comes from a separate source: the servicing guidelines of the investors who own most conventional loans — Fannie Mae and Freddie Mac. Because nearly all conventional PMI loans are sold to one of them, these guidelines apply to the large majority of borrowers, which is why current-value cancellation works in practice.
The trade-off is that the investor rules add a seasoning requirement the HPA doesn't, and the bar depends on how long you've owned the home:
- Owned 2 to 5 years: your balance must be 75% or less of the current appraised value.
- Owned more than 5 years: the standard 80% applies to the current value.
- Made substantial documented improvements: some servicers allow an 80% current-value request even inside the first two years.
So there are really two levers. The HPA gives you a firm legal right to cancel at 80% of original value; the Fannie Mae and Freddie Mac guidelines let you use your home's current, appreciated value once you've met the seasoning rules above. For homeowners in an appreciating market, the investor path is usually the one that pays off first.
What the Law Requires of Servicers
The HPA also imposes duties on servicers. They must provide annual notice of your right to cancel PMI, supply contact information for cancellation requests, and refund unearned premiums when PMI is terminated. A servicer that ignores a valid request or drags its feet may be acting in violation of federal law.
- Annual written notice of your cancellation and termination rights.
- A way to reach the servicer about PMI cancellation.
- Prompt action on valid cancellation requests.
- Refund of unearned PMI premiums after termination.
When a Servicer Won't Comply
If a servicer denies a clearly valid request or stonewalls, the HPA gives it teeth — borrowers can pursue remedies, and complaints can be filed with the Consumer Financial Protection Bureau. Often, simply citing the specific HPA provision in writing is enough to get a stalled request moving.
The Bottom Line
The Homeowners Protection Act means PMI is temporary by law — and combined with the Fannie Mae and Freddie Mac current-value rules, you rarely have to wait for the automatic schedule. The borrower-requested cancellation is your strongest lever, because between the two frameworks you can act on the equity you have today instead of the equity an old amortization table shows.
PMI Ninja builds every cancellation request around your HPA rights — citing the right provisions, meeting the servicer's lawful conditions, and pushing back when a servicer tries to ignore the law.
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