Mandatory Cancellation - For FHA loans closed on or after January 1, 2001, FHA is required to cancel the monthly mortgage insurance premium after the principal balance, excluding any up-front mortgage insurance premium financed in the loan, reaches 78% of the lower of the initial sales price or appraised value based on the initial amortization schedule.
For FHA loans with case numbers issued on or after June 3, 2013, the MIP will last for the life of the loan and can only be cancelled through paying off the loan or through a refinance.
Borrower Initiated Cancellation - Borrowers whose loans fall between 1/1/01 and 6/3/13 may request through the lender that FHA cancel the monthly mortgage insurance premium if the unpaid principal balance reaches 78% of the initial sales price or appraised value sooner than projected due to additional payments of principal made by the borrower. Increases in property value do not apply to this calculation. To be eligible, you must not have been more than 30-days late on a payment in the last 12 months. You must contact the lender to request this cancellation.