Yes — if you put less than 20% down, HomeReady® requires PMI. The difference versus FHA is that HomeReady PMI is cancellable once you build enough equity.
HomeReady is a conventional loan. When your loan-to-value ratio starts above 80%, lenders require private mortgage insurance to protect against default risk on the higher-LTV portion.
That PMI is not permanent by design. Once you reach 20% equity based on the original value (or a qualifying appraisal path), you can typically request cancellation. Automatic termination is required at 78% of the original value on a scheduled amortization path when other conditions are met.
Ryan and Steve model monthly PMI cost against FHA MIP so you see which program wins over the years you expect to keep the loan.
The monthly premium is only half the story — cancelability changes long-term cost.
Required under 20% equity. Can request cancel at 20% equity; automatic termination at 78% of original value on a qualifying path.
Upfront premium plus annual MIP. When you put less than 10% down, MIP often lasts for the life of the loan unless you refinance out.
Stay conventional, keep a clear PMI exit, and still put as little as 3% down when AMI-eligible.
Lower credit scores or higher DTI scenarios where FHA pricing and overlays produce a stronger approval path.
Illustrative conventional rules — your servicer confirmation controls the cancel date.
| Milestone | What happens |
|---|---|
| LTV above 80% | PMI is required on the HomeReady loan. |
| 20% equity (80% LTV) | Borrower-requested cancellation is typically available when payment history and other conditions are met. |
| 78% of original value | Automatic PMI termination is required on a qualifying amortization schedule. |
| 20%+ down at purchase | No PMI from day one — but most HomeReady buyers use a lower down payment and plan the cancel path. |
Related guides on HomeReady cost, equity, and program comparisons.
As little as 3% down — and how LTV affects PMI.
Cut cash to close without switching to FHA MIP.
Program overview — affordable conventional financing.
Eligibility calculator and VLIP grant screening.
How 80% and 78% LTV milestones work.
Compare cancellable PMI with FHA MIP.
Broader conventional financing options.
Yes when you put less than 20% down. HomeReady uses private mortgage insurance — the same cancellable PMI structure as other conventional loans — not FHA MIP.
Yes. Borrowers can typically request cancellation at 20% equity, and PMI must automatically terminate at 78% of the original value on a qualifying amortization path when other conditions are met.
It depends on credit, LTV, and loan size — but HomeReady’s big advantage is cancelability. Many FHA loans keep MIP for the life of the loan when you put less than 10% down.
Yes. Putting more than 3% down lowers starting LTV, which can reduce monthly PMI cost and reach the cancellation point sooner.
Ryan & Steve will compare monthly cost, cancel timelines, and total cost of ownership before you choose a program.
HomeReady is a registered trademark of Fannie Mae. All loans are subject to credit and property approval. Program guidelines, income limits, and pricing are subject to change without notice and may not be available in all areas. This website is not affiliated with or endorsed by Fannie Mae, HUD, or any government agency. Information is for educational purposes only and is not a commitment to lend.