How to Remove PMI in Texas: Conventional Loan Guide

You can usually remove PMI in Texas on a conventional loan in one of three ways: ask your servicer in writing once your balance reaches 80% of your home’s original value, ask for a review based on your home’s current value if you meet the seasoning and loan-to-value rules, or let it end automatically at 78% of the original value. Refinancing is a fourth path, but it comes with new costs. FHA mortgage insurance follows different rules. This guide explains each path in plain English, plus what a new Fannie Mae outreach change and this fall’s Texas price data mean for you.

TL;DR

Under federal law, you can generally ask to cancel PMI when your balance is scheduled to reach 80% of your home’s original value, or sooner if extra principal payments get you there.

PMI generally ends on its own when your balance is scheduled to hit 78% of original value, as long as you are current.

A current-value request may work if your home has gained value, but Fannie Mae generally requires 75% loan-to-value for loans seasoned two to five years and 80% after five years, plus a valuation.

Texas prices are mixed this fall, so paying down principal is often the more predictable path.

FHA mortgage insurance premiums (MIP) do not follow PMI cancellation rules.

Why PMI removal is in the news

On September 16, 2026, at the Federal Housing Finance Agency’s direction, Fannie Mae issued letter LL-2026-07, effective immediately. It lets servicers first contact borrowers whose loans “may be close to or have reached” the loan-to-value requirements for ending mortgage insurance based on the home’s current value and tell them what steps are required. Before this change, Fannie Mae said servicers could act only on a current-value request the borrower initiated. The guide will be updated later.

Main Street Dollars reported on October 10 that the letter allows outreach but does not require servicers to send anything, and that a letter or call from a servicer “is a prompt, not an approval.”

Home values are the other half of the story. The Texas REALTORS 2026 Q3 Texas Quarterly Housing Report, released October 20, put the statewide median price at $333,628, down 0.4% from a year earlier. Prices rose in 15 of 26 metros and fell in 10, and each of the four largest metros was down 1.2% or less. Texas Public Radio reported that the Texas median was $330,000 in September, down just under 1% from a year earlier, and that San Antonio’s median slipped 2% to just below $302,000. In other words, whether your home has gained value depends a lot on where it is.

First, confirm you have PMI and not FHA MIP

Private mortgage insurance (PMI) is usually required on a conventional loan when you put down less than 20%. It protects the lender, not you, if you stop making payments. The Consumer Financial Protection Bureau (CFPB) explains that the monthly premium appears on page 1 of your Loan Estimate and Closing Disclosure, in the Projected Payments section, and the upfront premium appears on page 2, in section B.

Before you call your servicer, check your closing papers or monthly statement for three things:

Your loan is conventional, not FHA or VA.
You pay the mortgage insurance yourself. If the mortgage company paid for it instead, different rules apply.
Which company services your loan today? Servicing can change hands after closing.

A Texas homeowner makes a phone call while reviewing a printed mortgage statement and a laptop at a bright kitchen counter

The federal Homeowners Protection Act rights described below apply to mortgages on single-family principal residences that closed on or after July 29, 1999, according to the CFPB. The law has an exception for certain high-risk loans, and investors such as Fannie Mae and Freddie Mac can set their own cancellation rules as long as they are not less favorable to you than the law.

Path 1: Ask to cancel at 80% of original value

For most homeowners, this is the clearest way to remove PMI. You can ask your servicer to cancel it on the date your principal balance is scheduled to fall to 80% of your home’s original value. That first date should appear on the PMI disclosure you received with your mortgage. If extra principal payments get you to 80% early, you can ask sooner.

What “original value” means: generally the lower of the contract sales price or the appraised value when you bought the home. If you refinanced, it is the appraised value at the time of refinancing. This path does not depend on today’s market. Your balance and your payment record matter most.

The CFPB says your servicer must grant the request if you:

Make the request in writing.
Have a good payment history and are current on your payments; certify that no junior liens, such as a second mortgage or home equity line, are on the home.
Can show, if asked (for example, with an appraisal), that the home’s value has not dropped below its original value.

For loans Fannie Mae owns, its Servicing Guide defines an acceptable payment record as current at the time of the request, with no payment 30 or more days late in the last 12 months and no payment 60 or more days late in the last 24 months. Ask your servicer which standard applies to your loan and what it needs from you before you pay for anything.

Path 2: Ask for a review based on current value

If your home has gained value, or you have made major improvements, a current-value request may let you drop PMI before your scheduled date. It is not as simple as “my home is worth more.” For a one-unit principal residence or second home, Fannie Mae’s Servicing Guide generally requires:

75% loan-to-value or less if the loan is between two and five years old.
80% loan-to-value or less if the loan is more than five years old.
80% or less, with the two-year wait waived if your improvements raised the value. Fannie Mae gives kitchen and bathroom renovations and added square footage as examples. Routine repairs do not count.
The same acceptable payment record described above.
A property valuation with an interior and exterior inspection, ordered through Fannie Mae’s process.

Freddie Mac’s servicing rules use similar current-value thresholds. If someone else owns your loan, or your home has two to four units, the rules can differ. Loan-to-value compares what you owe with what the home is worth.

Questions to ask your servicer before you start:

Who owns my loan, and do you accept current-value requests?
Is my loan seasoned long enough, and what loan-to-value do I need?
How is the value determined, who orders it, and who pays for it?
Do you need receipts or permits for improvements?

An online estimate, your appraisal district value, or an agent’s market analysis may not be accepted in place of the valuation your servicer requires. If a request is denied under Fannie Mae’s rules, the servicer must tell you the reasons, including the valuation results, within 30 days.

What Texa, price trends mean for a current-value request

With the statewide median down slightly and most big metros a little lower than a year ago, many Texas homeowners may not have gained enough value recently to reach the current-value thresholds. Others, in metros where prices rose, may be closer. One statewide number cannot tell you what your home is worth. If your area has been flat, paying down principal toward the original-value threshold is often the more predictable path.

If your servicer contacts you

Because of Fannie Mae’s change, you may get a letter, email, or call saying you might qualify to drop mortgage insurance. Read it carefully and follow the steps it lists. It does not mean your PMI has been removed or that a valuation will support the loan-to-value you need. If you don’t hear anything, you can still check your PMI disclosure and balance and ask yourself.

Path 3: Automatic termination at 78%

You do not always have to ask. Your servicer generally must end PMI automatically when your balance is scheduled to reach 78% of your home’s original value, as long as you are current. If you are behind on that date, it ends shortly after you catch up. There is also a final backstop: PMI must end the month after you reach the midpoint of your loan’s amortization schedule, which is 15 years into a 30-year loan, if you are current.

Once PMI is canceled or terminated, the Homeowners Protection Act says you generally cannot be charged premiums for more than 30 days afterward, and you must return any unearned premiums within 45 days. Because automatic termination happens after the 80% request date, it may make sense to submit your written request as soon as you qualify rather than wait.

Path 4: Refinance, if the numbers make sense

A new conventional loan with a low enough loan-to-value ratio may not require PMI. But a refinance means a new application, new terms, closing costs, and usually a new appraisal, and approval is never certain. Our guide on when refinancing makes sense in Texas walks through the break-even math.

Texas adds one more rule. If you take cash out when you refinance your homestead, the new loan is generally a home equity loan under Article XVI, Section 50(a)(6) of the Texas Constitution, and it, plus all other debt secured by the home, cannot exceed 80% of the home’s fair market value. See our cash-out refinance page for more.

Before refinancing only to drop PMI, compare:

How close your scheduled 80% date already is.
Whether an original-value or current-value request would work first.
The total closing costs and how long you plan to stay in the home.
The new loan term compared with the time left on your current loan.

As a mortgage broker, The Texas Mortgage Pros can help you compare refinance options from the wholesale mortgage companies we work with, subject to qualification and program availability.

FHA MIP follows different rules

FHA loans carry a mortgage insurance premium (MIP), not PMI, and the PMI cancellation rules above do not apply. FHA case numbers assigned on or after June 3, 2013, the annual MIP lasts 11 years if your original loan-to-value was 90% or less, and for the full mortgage term (up to 30 years) if it was above 90%. Some FHA homeowners look at refinancing into a conventional loan to end MIP, subject to qualifying and the costs involved. Your servicer can confirm which rule applies to your loan.

Removing PMI: do’s and don’ts

Do and avoid checklist for removing PMI: do find your PMI disclosure and 80% date, ask your servicer for its rules in writing, make every payment on time and keep records of major improvements; avoid treating a servicer letter as approval, paying for an appraisal before asking, counting on statewide price headlines and confusing FHA MIP with conventional PMI

Do

Find your PMI disclosure and note your scheduled 80% and 78% dates.
Check your current principal balance, not just your original loan amount.
Ask your servicer for its PMI cancellation requirements in writing.
Keep receipts, permits, and photos for major improvements.
Make every payment on time while you work toward cancellation.

Avoid

Treating a servicer letter as an approval.
Paying for an appraisal before you know your servicer’s valuation process.
Assuming statewide price headlines describe your home’s value.
Forgetting about a second mortgage or home equity line when you certify there are no junior liens.
Confusing FHA MIP with conventional PMI.

FAQ

Can I remove PMI once I have 20% equity?

Possibly. If your balance has reached 80% of your home’s original value, you can generally ask in writing. If you are counting on a higher current value, Fannie Mae generally requires 75% loan-to-value for loans two to five years old and 80% after five years, plus a valuation.

Will my servicer tell me when I qualify?

Not necessarily. Fannie Mae now allows servicers to reach out about current-value cancellation, but they don’t have to. Your PMI disclosure shows the first date you can ask based on your original payment schedule.

Do extra principal payments help?

Yes. Extra payments that lower your balance to 80% of the original value let you ask for cancellation sooner than scheduled. Ask your servicer how to make sure extra payments go to principal.

Does a home equity loan affect PMI cancellation?

It can. To cancel under the federal rules, you generally must certify that there are no junior liens on the home, such as a second mortgage or home equity line.

Can I cancel FHA mortgage insurance the same way?

No. For FHA case numbers assigned on or after June 3, 2013, annual MIP lasts 11 years or the life of the loan, depending on your original loan-to-value. Refinancing into a conventional loan is one option some homeowners consider.

Talk with a Texas mortgage broker

The fastest first step to remove PMI in Texas is a written request to your servicer once you qualify. If you are weighing a refinance, The Texas Mortgage Pros can help you compare options from the wholesale mortgage companies we work with. Call (877) 280-4833, apply online, or contact our team with questions. You can also explore our conventional loan options.

Official sources

The Texas Mortgage Pros, LLC | Company NMLS #2665861 | Equal Housing Opportunity | www.nmlsconsumeraccess.org | (877) 280-4833

Equal Housing Opportunity. We do business in accordance with federal fair lending laws.

How to Remove PMI on a Conventional Loan in Texas

ByGerry Nicodemus