Private mortgage insurance, also known as “PMI,” is a type of mortgage insurance that may be required if you have a conventional loan with a down payment of less than 20 percent of the purchase price or if your equity is less than 20 percent of the value of your home on a refinance. PMI protects the lender against financial loss if you default on payments or cannot meet your mortgage obligations. PMI does not protect the homeowner and differs from homeowners insurance, which is required to pay for losses and damage to your property.

Your lender will arrange the PMI, and a private insurance company will issue the policy. PMI premiums may be included in your total monthly payment, paid up front as a one-time up-front premium at closing, or be a combination of both up-front and monthly premiums.

The Homeowners Protection Act, also known as the PMI Cancellation Act, gives homeowners specific rights over PMI for conventional loans. Under the Act, you may be able to remove PMI once you have paid down your mortgage to a specified point. In addition, under certain circumstances, PMI may be automatically canceled once your loan balance reaches a certain percentage of your home’s value or you have reached a certain point in your mortgage loan term. 

Mortgages through the Federal Housing Administration (FHA) or Department of Veterans Affairs (VA) are not covered under the Act and have different requirements.

The Act is enforced by the Consumer Financial Protection Bureau (CFPB). You can learn more about PMI and your rights under the Homeowners Protection Act through the CFPB. Taking a CHFA-sponsored homebuyer education class is also a good way to get more information about mortgage insurance. Register for a homebuyer education class today!

CHFA’s 2026 David W. Herlinger Golf Tournament will be held Wednesday, September 16th, at Arrowhead Golf Club in Littleton. This year’s beneficiary is Project Diakonia. The nonprofit empowers underserved youth through vocational training and education, paving the way for them to transform their lives. Project Diakonia’s vision is a Colorado where every young adult has a pathway to success, regardless of their needs, barriers, or background. The organization focuses on the hardest-to-reach youth—homeless youth, out-of-school youth, those enrolled in alternative schools, those involved in the justice system, and those exiting foster care—offering vocational training, education support, career navigation, and financial support. Learn more about Project Diakonia.

Colorado Housing and Finance Authority

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