Homeowners Protection Act (HPA)

Before the HPA, PMI could quietly outlive its purpose for years. The law (12 USC 4901-4910) fixed that with three exits keyed to the home’s original value, the lesser of the purchase price and the origination appraisal: a borrower-requested cancellation right at 80 percent LTV (good payment history and no junior liens required), mandatory automatic termination the month the scheduled balance reaches 78 percent, and a final backstop at the loan term’s midpoint regardless of balance.

Two boundaries matter in practice. The statute covers private mortgage insurance on single-family primary residences; FHA mortgage insurance runs on entirely different rules. And because the thresholds use original value, appreciation cannot trigger them, though investor guidelines (Fannie Mae, Freddie Mac) let servicers cancel on a current appraisal, a faster route in rising markets. The PMI removal calculator finds both statutory dates for your loan and prices the cost of waiting.