Fannie Mae will update its mortgage-servicing guide so loan servicers can proactively tell homeowners when a rising home value or a paid-down balance makes them eligible to cancel private mortgage insurance, under a directive from FHFA Director Bill Pulte. The change would let a servicer reach out once a loan’s balance falls to 80% of the home’s current value, the threshold for a homeowner-requested cancellation, matching a practice already allowed on loans backed by Freddie Mac. Until this announcement, Fannie Mae did not authorize that kind of unsolicited call.
Inside the kit: The Senior Property Tax & Home-Cost Relief Kit covers the 5 kinds of property-tax relief and the circuit-breaker credit that includes renters, the kind of homeowner savings that, like PMI cancellation, usually has to be requested rather than applied automatically. Compare PMI cancellation with the 5 kinds of property-tax relief →
FHFA’s Directive to Fannie Mae
Pulte announced the change in a public post on Sept. 15, 2026, writing that Fannie Mae would follow Freddie Mac’s existing rule and let servicers contact borrowers who may qualify to drop private mortgage insurance because their home has gained value, according to National Mortgage News’s report on the directive. “If your Home is worth more, or you have paid the loan down far enough, you should be able to drop EXTRA Mortgage Insurance,” Pulte said, framing the change as closing a gap between how Fannie Mae and Freddie Mac each handled the same kind of loan.
The 80% and 78% Thresholds
Under the change, a servicer could reach out once a loan reaches 80% loan-to-value, the point at which a borrower can formally request PMI cancellation, and the policy also covers the 78% loan-to-value point at which mortgage insurance is required to terminate automatically under federal law regardless of whether a borrower asks. Both thresholds already governed conventional loans before this announcement; the Consumer Financial Protection Bureau explains the general cancellation and termination rules that apply across most conventional mortgages. What changes under Fannie Mae’s updated guide is not the thresholds themselves but whether a servicer is allowed to flag a borrower’s eligibility before that borrower thinks to ask. Both thresholds date back to the Homeowners Protection Act, a federal law that has governed private mortgage insurance cancellation and automatic termination on conventional loans for years, so this change works inside a framework Congress already set rather than creating new cancellation rights.
How This Differs From What Fannie Allowed Before
Pulte’s own framing of the announcement pointed to a specific gap: “Right now [Fannie Mae] will not let your loan company call and tell you that you may qualify because your home has gone up in value!” according to HousingWire’s report. That meant a homeowner with a Fannie Mae-backed loan whose home value climbed enough to cross the 80% threshold had no guarantee their servicer would ever mention it, leaving cancellation dependent on the borrower tracking their own home’s value and initiating the request. A borrower who refinanced, made extra principal payments, or watched local home values climb had no built-in prompt from Fannie Mae’s side reminding them to check, even though the servicer serving that same loan likely had enough data to flag it.
Freddie Mac’s Existing Practice
Freddie Mac already permits its servicers to proactively contact borrowers nearing the mortgage-insurance cancellation threshold, which is the model Fannie Mae’s updated guide is meant to match. Because Fannie and Freddie together back a large share of the country’s conventional mortgages, aligning the two on this point means a homeowner’s experience going forward would depend less on which of the two companies happens to own their loan and more on where their loan-to-value ratio actually stands. Freddie Mac has followed its own outreach practice for some time without this becoming a major point of public attention, which is part of why Pulte’s Sept. 15 statement framed the Fannie Mae change as catching up to an existing standard rather than inventing a new one.
What a Homeowner Should Expect
Once Fannie Mae’s guide is updated, a homeowner with a Fannie-backed loan could start hearing from their servicer once their estimated loan-to-value ratio nears the cancellation threshold, rather than having to track the math independently and request cancellation cold. A servicer’s outreach is not the same as automatic cancellation at 80% LTV, since that tier still requires the borrower to make a request and typically to show the home’s current value supports it; only the 78% threshold cancels mortgage insurance without any borrower action at all, and that automatic cutoff has applied under federal law for years regardless of which company backs the loan. A homeowner who is unsure whether their loan is backed by Fannie Mae or Freddie Mac can ask their servicer directly, since the backing investor determines which company’s updated guide applies to a given loan. Mortgage statements and closing paperwork typically disclose whether Fannie Mae or Freddie Mac backs a loan, though many homeowners never look closely at that detail until a question like this one comes up, and a servicer’s own customer service line is usually the fastest way to confirm it without digging through old paperwork.
The Other Housing Costs A Servicer Won’t Flag
Fannie Mae’s new outreach policy addresses one cost, private mortgage insurance, that a servicer is able to flag once a loan crosses the 80% loan-to-value threshold. It says nothing about property-tax relief, exemptions or utility assistance, the kind of homeowner savings that typically require an application rather than a letter from a lender.
The Senior Property Tax & Home-Cost Relief Kit lays out the 5 kinds of property-tax relief and help with heating, cooling and home-repair costs for homeowners tracking down savings no servicer calls about.
Compare the 5 kinds of property-tax relief in The Senior Property Tax & Home-Cost Relief Kit.
This article was produced with AI assistance and reviewed by a human editor, who checked Pulte’s quotes and the LTV thresholds against two independently fetched reports.
