How to Cancel PMI With Home Appreciation in Texas 2026: New FHFA Policy, DFW Math, and Step-by-Step Guide

On September 15, 2026, FHFA announced that Fannie Mae is aligning with Freddie Mac's policy allowing servicers to proactively contact borrowers who may qualify to cancel their private mortgage insurance. If you bought a home in DFW with less than 20% down somewhere in the last 3–5 years, that call might be coming — or you shouldn't wait for it and should request cancellation yourself right now.

I'm Bond Peter Njoku (NMLS #2670329), a licensed mortgage loan officer serving DFW homebuyers and existing homeowners from Garland, TX. PMI cancellation is one of the most overlooked ways to reduce a monthly mortgage payment without refinancing, and in the current 7%+ rate environment, the last thing you want to do is give up a 2022 or 2023 loan rate just to drop PMI. Here's everything you need to know about the new FHFA policy, the DFW appreciation picture, and exactly how to request cancellation today.

What Did FHFA Change About PMI Cancellation in September 2026?

Before this change, your loan servicer was only allowed to cancel PMI when you specifically asked — or when your loan reached 78% LTV on the original amortization schedule (the automatic termination point under the Homeowners Protection Act of 1998). Freddie Mac had already allowed servicers to proactively reach out to qualifying borrowers, and Fannie Mae lagged behind with a policy that essentially said "wait for the borrower to ask."

As of September 15, 2026, Fannie Mae aligned with Freddie Mac. Now servicers on both Fannie and Freddie loans can — and should — contact you if their records show your LTV may have dropped to cancellation range because of home appreciation, principal paydown, or both. The key word is "may" — they're using their own home value estimates, which can be conservative. Getting an independent appraisal and making a formal written request is still the most reliable path.

What Are the PMI Cancellation Thresholds Under Current Rules?

The distinction that trips up the most Texas homeowners: if you're between 2 and 5 years into your loan and relying on market appreciation (not paydown) to get to cancellation range, most servicers require you to hit 75% LTV — not 80%. After 5 years, the standard 80% applies. This is important because many DFW buyers who purchased in 2022–2023 are now in year 3–4 of their loans.

How Much Have DFW Home Values Appreciated Since 2022?

Dallas-area home prices hit a peak in mid-2022 and then pulled back slightly through 2023 before stabilizing. As of Q3 2026, the median sale price in Dallas is approximately $449,000 per Redfin, with year-over-year appreciation around 2.6% for most DFW submarkets. That's modest — it's not the 15%+ years of 2021–2022. But combined with four or more years of principal paydown, many homeowners who put down 5–10% in 2022 are now in the cancellation window.

Here's the math on a typical DFW scenario from 2022:

• Purchase price: $375,000 in mid-2022 with 5% down ($18,750 down, $356,250 loan)
• 4 years of principal paydown at 6.5% on a 30-year loan: approximately $18,000 in principal paid
• Current loan balance: ~$338,000
• Home value at 2.5% annual appreciation over 4 years: approximately $413,000
• Current LTV: $338,000 ÷ $413,000 = 81.8% — just above the 80% threshold for 5-year+ removal
• Wait 12 more months (year 5+): balance drops to ~$330,000, home at ~$423,000 → LTV 78% → in range

If that home appreciated slightly more — say 3% annually — current LTV would be closer to 79%, putting this homeowner in cancellation range right now. A $500 appraisal is the only cost to find out.

How Do I Request PMI Cancellation on My Texas Mortgage?

Here are the exact steps:

1. Estimate your current LTV first. Check your current balance on your servicer's online portal, then estimate your home's value using Zillow, Redfin, and recent sales comps in your neighborhood. If your estimated LTV is near 75–80%, proceed to step 2.
2. Order a licensed appraisal. You need a formal appraisal from a state-licensed Texas appraiser — not an automated valuation model (AVM). In Collin and Denton counties, appraisers like Stafford Appraisals serve the DFW area at $400–$600. Make sure the appraiser is approved by your servicer (ask your servicer for their approved list first).
3. Submit a written cancellation request. Send a certified letter to your servicer's address (found on your monthly statement) requesting PMI cancellation. Include the appraisal report, your loan number, and a statement citing the Homeowners Protection Act of 1998.
4. Confirm good payment history. You must be current on all payments with no 30-day-late marks in the past 12 months.
5. Follow up in writing. Servicers have 30 days to respond. If they don't, escalate to the CFPB complaint portal at consumerfinance.gov/complaint.

I worked with a homeowner in Richardson last spring — they bought in 2022 at $410,000 with 10% down. By 2026 their loan balance was down to $342,000 and a new appraisal came in at $445,000. Their LTV was 76.9% — inside the 75% threshold for a year-3-through-5 appreciation-based request. Their PMI was $198 a month. We got it cancelled in 34 days from the date we submitted the written request. That's $2,376 a year back in their pocket without touching their 6.1% mortgage rate — which they definitely don't want to give up in today's 7.2% market.

Does the New FHFA Policy Change Anything If My Servicer Contacts Me First?

If your servicer reaches out saying you may qualify for PMI cancellation, treat that as a confirmation to move forward — but verify their numbers. Servicers use automated home value models that can underestimate appreciation, especially in DFW neighborhoods where comps vary significantly by street. An independent appraisal is still the most reliable path to a successful cancellation and gives you documentation to dispute any servicer pushback.

The practical difference the new policy makes: it means more DFW homeowners will become aware they qualify, instead of continuing to pay $150–$250 per month in PMI they no longer technically owe.