Your rights under the Homeowners Protection Act, explained

One federal law governs almost everything about canceling PMI: what you can request, what happens automatically, and what your servicer is allowed to require of you first.

What the law is and why it exists

Before 1999, PMI cancellation was entirely up to your lender's discretion, and many kept collecting it long after a borrower had built enough equity to no longer need it. Congress passed the Homeowners Protection Act of 1998 (codified at 12 U.S.C. §4902) to set clear, enforceable rules for when PMI must end on conventional, single-family, owner-occupied mortgages closed after July 29, 1999.

The three rights the HPA gives you

• Borrower-requested cancellation at 80% LTV. Once your balance falls to 80% of your home's original value (or appraised value, if higher, at closing) and you're current on payments, you can request cancellation in writing.
• Automatic termination at 78% LTV. Your servicer must cancel PMI automatically once your balance is scheduled to hit 78% of the original value under your original amortization schedule, even if you never ask.
• Final termination at the midpoint of your loan term. If you haven't hit 78% by amortization alone, PMI must still terminate at the midpoint of your loan term (e.g., year 15 of a 30-year loan), regardless of LTV, as long as you're current on payments.

What the law does not guarantee

The HPA is specific to conventional loans. It does not cover FHA mortgage insurance premiums (MIP), which follow entirely separate rules under HUD and often last the life of the loan regardless of equity. It also doesn't override your servicer's right to require a fresh appraisal (typically $400–$600) if your case for reaching 80% relies on market appreciation rather than paydown alone.

What happens if your servicer doesn't comply

The HPA is enforceable. Servicers that fail to automatically terminate PMI at 78% LTV, or that unreasonably deny a valid 80% cancellation request, can face regulatory action. Most delays are administrative rather than deliberate, and a written request with your loan number and current LTV, followed by a phone call two to three weeks later, resolves the vast majority of cases.

Knowing your rights is one thing; knowing the exact month you can exercise them is another. CasaCrow tracks both thresholds continuously against your real numbers and tells you the moment either applies.