Key facts
- FHFA Director Bill Pulte is enabling Fannie Mae and Freddie Mac to allow mortgage companies to contact borrowers about dropping PMI.
- The change permits outreach when home values rise or loan principal falls sufficiently.
- Fannie Mae will adopt Freddie Mac's policy on proactive borrower contact for PMI cancellation.
- Pulte stated that homeowners could save money by dropping unnecessary extra mortgage insurance.
- Taxes and insurance account for an average of 21% of monthly mortgage payments nationwide.
- The average single-family mortgage holder paid $209 per month for insurance in Q2 2026, up nearly 80% since early 2020.
Federal Housing Finance Agency (FHFA) Director Bill Pulte is initiating a policy change that will allow Fannie Mae and Freddie Mac to permit mortgage companies to proactively contact borrowers about potentially canceling private mortgage insurance (PMI). This move aims to help homeowners reduce their monthly housing expenses when their property values have increased or their loan principal has been paid down sufficiently.
Pulte announced the shift on social media, stating that Fannie Mae will adopt Freddie Mac's existing policy, which allows mortgage servicers to reach out to borrowers who may qualify to drop PMI. Currently, Fannie Mae does not permit such outreach, requiring borrowers to initiate the inquiry themselves.
The initiative comes as non-principal costs, such as taxes and insurance, are placing a significant burden on homeowners' budgets. A March report from Neighbors Bank indicated that these costs constitute an average of 21% of monthly mortgage payments across the U.S. According to data from Intercontinental Exchange (ICE), the average single-family mortgage holder paid a record $209 per month for insurance in the second quarter of 2026, representing an increase of nearly 80% since the beginning of 2020.
Mortgage insurance is typically required for borrowers with down payments below 20% to mitigate lender risk. While homeowners can request PMI removal by obtaining a new appraisal, this process often involves an upfront cost of $500 to $700 and typically requires a minimum period of on-time payments, as noted by Todd Bitter, national director of sales at NEXA Lending. Pulte expressed his view that homeowners should not have to pay for "extra" or "unnecessary" mortgage insurance, highlighting the substantial profits of mortgage insurance companies.