If you're paying Private Mortgage Insurance (PMI) on your Minnesota home, you might be able to eliminate it and save $150-$250 or more each month - money that's currently only protecting your lender, not you.

PMI is required when you purchase a home with less than 20% down. Once you've built sufficient equity, you have the right to cancel it. The key question is: which set of rules applies to your mortgage? The answer depends on whether your lender is state-chartered or federally-chartered, and that distinction can make a huge difference in how quickly you can eliminate PMI.

The Critical Distinction: State-Chartered vs. Federally-Chartered Lenders

Both federal law and Minnesota law allow you to cancel PMI once you owe 80% or less on the value of your home. But there's a massive difference in how "value" is determined:

Minnesota-Chartered Lenders (State Law = Current Market Value)

If your lender is chartered in Minnesota, state law allows you to benefit from market appreciation. The value of your home is based on what it would be worth if you sold it today.

Example: You bought your home for $350,000 with 5% down ($17,500). Your original loan was $332,500, and you're paying $200/month in PMI. Two years later, your home has and is now worth $420,000. Your loan balance is $320,000.

• Under Minnesota law: $320,000 ÷ $420,000 = 76% LTV → You qualify for PMI cancellation

• Savings: $200/month = $2,400/year

Common Minnesota-Chartered Institutions:

• Banks: BankCherokee, Bridgewater Bank, Sunrise Banks, Alliance Bank, Alerus Financial

• Credit Unions: Blaze Credit Union, Wings Financial Credit Union, TruStone Financial, Affinity Plus Credit Union, Minnesota Valley Federal Credit Union

Federally-Chartered Lenders (Federal Law = Original Purchase Price)

If your lender is federally chartered, federal law does NOT require them to consider market appreciation. They can require you to wait until your loan balance drops to 80% of your home's original purchase price through regular payments, which can take years or even a decade.

Same example with a federally-chartered lender: Your home was purchased for $350,000, and your current loan balance is $320,000.

• Under federal law: $320,000 ÷ $350,000 = 91% LTV → You do NOT qualify yet

• You'd need to pay down to $280,000 (80% of $350,000) to qualify

Common Federally-Chartered Institutions:

• National Banks: U.S. Bank N.A., Wells Fargo Bank N.A., Huntington National Bank, JPMorgan Chase Bank N.A., Bank of America N.A., PNC Bank N.A.

• Federal Credit Unions: Affinity Plus Federal Credit Union, Spire Credit Union

How to Identify Your Lender's Charter Type

The easiest way is to look at the official name:

• Federally chartered: Includes "National Association" or "N.A." in the name, OR "Federal" for credit unions

• State chartered: No "N.A." or "Federal" in the name

When in doubt, call your lender directly and ask: "Are you state-chartered or federally-chartered?"

Important note: The lender that services your loan (where you send payments) is what matters here, not who owns the loan.

The Fannie Mae & Freddie Mac Factor

Here's where it gets a bit more favorable: Most conventional mortgages (loans that aren't FHA or VA) are actually owned by Fannie Mae or Freddie Mac, even if you make payments to a different bank.

These government-sponsored enterprises have their own guidelines that are more flexible than the basic federal law - they DO allow current market value to be considered, but with "seasoning" requirements:

• Years 2-5: You can cancel if you have 25% equity (75% LTV) based on current value

• After 5 years: You can cancel with 20% equity (80% LTV) based on current value

Check if Fannie or Freddie owns your loan:

• Fannie Mae lookup: knowyouroptions.com/loanlookup

• Freddie Mac lookup: mymortgage.freddiemac.com

If Fannie or Freddie owns your loan and you're with a federally-chartered servicer, you can request PMI cancellation under their more favorable guidelines. However, some federally-chartered servicers may still default to the stricter federal rules unless you specifically cite the Fannie/Freddie guidelines.

Why Minnesota Law is Powerful

If you have a Minnesota-chartered lender, you get the best of both worlds:

• No waiting period beyond the typical 2-year minimum

• Immediate benefit from market appreciation

• Clear legal protection under Minnesota Statutes

With Minnesota's strong real estate market, particularly in the Twin Cities metro and surrounding areas, many homeowners have seen significant appreciation in recent years. That appreciation can translate to PMI freedom years earlier than federal law would allow.

The Appraisal: Your Proof of Value

Whether you're working with a state or federally-chartered lender, if you're requesting PMI cancellation based on current market value, you'll need a professional appraisal to prove your equity position.

What you need to know about PMI removal appraisals:

• Cost: Typically $500 but pays for itself quickly when PMI is eliminated.

• Minnesota law protection: If your lender is Minnesota-chartered, state law gives you the right to choose your own appraiser (as long as they're "reasonably acceptable" to your lender). Your lender cannot require you to pick only from their approved list.

• Federal lender requirements: Federally-chartered lenders typically require you to use an appraiser from their approved list

• Timeline: Most appraisals are completed within 3-5 business days

Why work with an appraiser experienced in PMI removal:

• We understand both Minnesota law and Fannie Mae/Freddie Mac guidelines

• We know what documentation lenders require for PMI cancellation

• We're familiar with Twin Cities neighborhoods and comparable sales

Requirements for PMI Cancellation

Regardless of which law applies, you'll typically need:

• No late payments: Clean payment history for the past 12 months (no 30+ day late payments)

• Minimum loan age: Usually at least 2 years since origination

• No subordinate liens: No second mortgages or HELOCs

Step-by-Step: How to Cancel Your PMI

Step 1: Identify your lender type Look for "N.A." or "Federal" in your lender's name, or call them directly to ask.

Step 2: Determine which rules apply

• Minnesota-chartered → Minnesota law (current value)

• Federally-chartered → Check if Fannie/Freddie owns your loan for potentially better terms

Step 3: Verify your loan lookup (if applicable) Use the Fannie Mae and Freddie Mac lookup tools to see if they own your mortgage.

Step 4: Estimate your equity Look at recent sales in your neighborhood. Has your property appreciated? Consider improvements you've made.

Step 5: Check your eligibility Review your payment history and loan age. Ensure you meet the basic requirements.

Step 6: Contact your lender in writing Send a formal written request for PMI cancellation. Ask about:

• Their specific appraisal requirements

• Whether you can choose your own appraiser (if Minnesota-chartered)

• Their approved appraiser list (if federally-chartered)

• Processing timeline once appraisal is complete

Step 7: Order your appraisal Work with an appraiser who:

• Is licensed in Minnesota

• Understands PMI removal requirements

• Has experience with your type of lender

Step 8: Submit and follow up Once the appraisal confirms sufficient equity, your lender typically has 30 days to process the cancellation.

Real Minnesota Example

A homeowner with a Minnesota-chartered credit union bought a home in the Highland neighborhood of St. Paul in 2022 for $375,000 with 5% down, paying $210/month in PMI.

By late 2024, their neighborhood had appreciated, and a new appraisal came in at $450,000. With their loan balance at $355,000, they had 21% equity.

Under Minnesota law: PMI canceled immediately. Had they been with a federally-chartered bank using strict federal rules, they would have needed to wait until their balance reached $300,000 (80% of original purchase price) - potentially another 5-7 years of PMI payments.

Total savings by using Minnesota law: Approximately $15,000-$17,000

When to Consider Refinancing Instead

PMI removal isn't always the best path. Consider refinancing if:

• You've owned the home less than 2 years (may not qualify for removal yet)

• Interest rates have dropped since you bought

• You want to access equity for other purposes

FHA and VA Loans: Different Rules

If you have an FHA loan, the mortgage insurance rules are different and generally can't be removed without refinancing into a conventional loan. VA loans don't require PMI at all, just an upfront funding fee.

Get a Free PMI Removal Consultation

Not sure if you qualify? We offer a free consultation to Minnesota homeowners considering PMI removal.
We will:

• Review your lender type and which rules apply

• Estimate your current home value and equity position

• Explain your specific path to PMI cancellation

• Provide transparent pricing with no hidden fees

Our services:

• Fast turnaround: 3-5 business days for most appraisals

• Licensed Minnesota appraisers

• USPAP-compliant reports accepted by all major lenders

When Things Don't Go Smoothly

If your lender denies your request and you believe you meet the requirements:

For Minnesota-chartered lenders:

• Minnesota Department of Commerce: (651) 539-1500

• Minnesota Attorney General's Office: (651) 296-3353

For federally-chartered lenders:

• Consumer Financial Protection Bureau: consumerfinance.gov/complaint

• Office of the Comptroller of the Currency: (800) 613-6743

Don't Wait - Every Month Costs You Money

Minnesota law requires lenders to send annual notices about PMI cancellation eligibility, but why wait? If you think you might qualify, especially with a Minnesota-chartered lender, start the process now.

With home values remaining strong across Minnesota, particularly in the Twin Cities metro, this may be the perfect time to eliminate your PMI and put that $150-$250+ back in your pocket every month.

Ready to see if you qualify? Contact us today for your free consultation.

How to Cancel PMI on Your Minnesota Mortgage: A Practical Guide