No, not private mortgage insurance: an FHA loan carries FHA's own mortgage insurance premium, paid to HUD rather than to a private insurer, charged once upfront and again annually, and on a loan that started above 90 percent of value that annual premium runs for the term instead of ending at 78 percent.
The question is really about a word. PMI means private mortgage insurance, a policy a private company sells a lender on a conventional loan, and the federal cancellation rules attach to that policy. FHA is not private, so the strict answer is no. The bill still arrives every month; it just belongs to a different program with a different price and a different ending, and the differences cost money.
Who insures the loan, and who gets paid
On a conventional loan the lender buys a policy from a private mortgage insurer, and the Homeowners Protection Act governs when it ends. On an FHA loan the insurer is FHA itself, part of HUD, and the rules come from HUD's single-family handbook and its mortgagee letters rather than from that statute. So the 80 and 78 percent cancellation rules do not reach an FHA premium at all. Servicers say this to borrowers every day and it is often heard as a refusal rather than as the rule it is.
Two premiums, one upfront and one annual
FHA charges both. The upfront premium is 1.75 percent of the base loan amount and is almost always financed rather than paid at the table, which is why an FHA loan amount comes out larger than the price minus the down payment.
The annual premium is collected monthly, one twelfth at a time, and both its rate and its duration come from the original loan-to-value and the term. On a 30-year loan under HUD's loan-size threshold the rates have stood since March 2023 at 0.50 percent where the loan started at or below 90 percent of value, running 11 years, and 0.55 percent where it started above 95 percent, running for the term. Between those two it is 0.50 percent, also for the term. Larger loan amounts pay more. HUD revises the table by mortgagee letter, so confirm it at hud.gov.
The duration is fixed at closing by where the loan started. It does not shorten because the balance came down.
A $350,000 purchase at the 3.5 percent minimum
FHA's minimum down payment is 3.5 percent, so on a $350,000 house that is $12,250 down and a base loan of $337,750. The upfront premium at 1.75 percent is about $5,911, and financed it takes the loan to roughly $343,661. At 6.5 percent over 30 years, principal and interest are about $2,172.
The annual premium at 0.55 percent of that balance is about $1,890 a year, near enough $158 a month, and because the loan started at 96.5 percent of value it is charged for all 30 years. The first 11 years alone come to about $21,000, and nothing happens at the end of them.
A conventional loan at the same price and the same 3.5 percent down carries private mortgage insurance instead, about $169 a month at the calculator's default of 0.6 percent a year. Higher monthly, and it ends: the balance reaches 78 percent of original value in month 142, just under twelve years, and automatic termination applies. Conventional pricing at that loan-to-value also turns on the credit score in a way FHA's published rate does not.
The exit is a refinance, not a cancellation
Because the annual premium on a low-down-payment FHA loan runs for the term, there is no request that ends it and no balance at which it drops off. Short of selling or paying the loan off, it ends with a refinance into a conventional loan, once the house carries enough equity that the new loan is at or below 80 percent of the current appraised value.
That is a trade rather than a saving. The new loan comes with whatever rate exists on the day and a new set of closing costs, so whether it comes out ahead is the premium removed against the rate and costs added.
One narrow exception: FHA loans with case numbers issued before June 2013 followed an older rule under which the annual premium could end at 78 percent of original value, with a minimum of five years. Anything written since is on the current handbook.
Questions people ask
Can you remove PMI from an FHA loan?
Not as a cancellation, on a loan written since June 2013 that started above 90 percent of value, because the annual premium runs for the term rather than to a loan-to-value figure. Refinancing into a conventional loan that needs no mortgage insurance is the route people take.
How long do you pay mortgage insurance on an FHA loan?
Eleven years where the loan started at or below 90 percent of value, which means 10 percent or more down, and for the full term where it started above that. The duration is fixed at closing by the original loan-to-value; it does not shorten as the balance falls.
Is FHA mortgage insurance cheaper than PMI?
Month to month it often is at a lower credit score, because FHA charges one published rate while private mortgage insurance is priced off the score. Over the life of the loan it is usually more, because it does not end on a low down payment and 1.75 percent is financed on top.