Only conventional loans with a down payment of 20% or more are automatically exempt from PMI. Conventional loans are mortgages not backed by the federal government. Mortgages are conventional “compliant” loans, meaning that they meet the credit guidelines established by Fannie Mae and Freddie Mac. If you have served in the military, you may be eligible for a U.S.-backed loan.
UU. You can buy a home with no down payment or mortgage insurance. However, you may have to pay a funding fee unless you're exempt due to a service-related disability. VA loans and USDA loans have no mortgage insurance requirements.
However, these loans have fees that help secure the mortgage. When you finance a home with a VA loan, you'll have to pay a one-time VA financing fee. Surviving spouses and some disabled veterans are exempt from paying this fee. When you finance a home with a USDA loan, you must pay an initial warranty fee as well as an annual fee.
If you're a doctor or veteran, you might also be exempt from PMI, even if you don't deposit 20 percent.
