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New Report: 800,000 Low Down Payment Borrowers Purchased Homes in 2024 with Private Mortgage Insurance
Supported by Private MI, First-Time Buyers Successfully Navigated High Rate Market While Government and Taxpayers Were Protected

WASHINGTON, DC — New data shows that private mortgage insurance (MI) helped more than 800,000 low down payment borrowers qualify for home financing in 2024. Last year, homebuyers contended with constrained housing supply, high home prices, and elevated mortgage interest rates, but the report from U.S. Mortgage Insurers (USMI) highlights how hundreds of thousands of households across the country were able to become homeowners through low down payment mortgages backed by private MI. What’s more, publicly reported data confirm that the cost of private MI, as measured by in-force premium yields, has declined 25% since 2017, in stark contrast to other costs of homeownership, reaffirming that the small, temporary cost of monthly private MI provides homebuyers, lenders, the GSEs, and taxpayers with outsized benefits. The new report details how private MI is strong private capital that provides stability to the housing market and broader financial system.

“For nearly seven decades, private MI has provided a dual benefit to the housing market: it creates homeownership opportunities for qualified borrowers – particularly first-time homebuyers – who lack substantial down payments, while simultaneously serving as a robust safeguard against mortgage default, thereby reducing overall risk in both the housing and financial markets,” said Seth Appleton, president of USMI.

National Trends
The new USMI report found:

• Over 800,000 households in 2024 became homeowners using low down payment mortgages backed by private MI – an increase from 2023.
• 65% of purchasers with private MI in 2024 were first-time homebuyers. Nearly 35% had annual incomes below $75,000.
• $362,632 was the average loan amount for a home purchase backed by private MI in 2024.
• Saving for a 20% down payment could take the typical potential homebuyer 27 years — nearly three times longer than the time to save for a 5% down payment that’s often used with private MI.
• The total value of mortgage originations supported by private MI in 2024 was nearly $300 billion.
• As of the end of 2024, the industry insured nearly $1.6 trillion of mortgages, including $1.4 trillion of mortgages backed by Fannie Mae and Freddie Mac, protecting the housing finance system and taxpayers from credit risk.
• The private MI industry has covered nearly $60 billion in claims for losses since the 2008 financial crisis.
• Nearly 40 million borrowers have benefited from private MI since 1957.

“This latest data demonstrates that private MI remains instrumental in helping first-time buyers and working-class families become homeowners and start building generational wealth, despite facing obstacles from high home prices and persistently elevated interest rates,” said Appleton. “Despite these dynamics, monthly private mortgage insurance is a small, temporary cost that helps borrowers overcome the down payment barrier and achieve the American dream sooner.”

Top Five States Where Borrowers Used Private Mortgage Insurance in 2024
Texas, Florida, California, Illinois, and Ohio ranked as the top five states for mortgage financing with private MI in 2024. These states were also ranked in the top five for private MI use in 2023 and 2022.

Why Use Private Mortgage Insurance?
Private MI helps low down payment borrowers access affordable mortgage financing while protecting the government, taxpayers, lenders, and investors against risk. Private MI enables a borrower to qualify for mortgage financing with a down payment as low as 3%. Borrower paid monthly private MI, the most commonly used form, is only a temporary cost for homebuyers, as it can be canceled once the loan meets certain requirements.

Private MI allows borrowers – who are not able to put down 20% – to qualify for a conventional loan by insuring the lender against potential losses in the event a borrower is unable to repay the loan and there is not sufficient equity in the home to cover the amount owed. Amassing a large down payment can be one of the biggest hurdles to homeownership, particularly for first-time buyers. USMI’s 2024 Homeownership Market Survey found that while homeownership is very important to survey respondents, nearly 6 in 10 (58%) of all adults believe buying a home was more difficult or challenging in 2024 than in prior years. Poll respondents indicated that the main reasons it had gotten harder to buy a home include higher home prices (81%) and higher interest rates (71%). Many say the top challenge they will face when buying a home is an inability to afford a down payment. Meanwhile, only one-third of respondents were aware that it is possible to qualify for financing with only 3% or 5% down.

Recently, President Trump signed the One Big Beautiful Bill Act into law, which contained a provision to reinstate and make permanent the deductibility of MI premiums. This move by Congress and the President means the return of a deduction that provides working class homeowners with meaningful tax relief without increasing risk in the housing finance system. USMI has long advocated for the reinstatement of this deduction, which was claimed more than 44 million times for tax years 2007-2021. Additionally, the 2017 Tax Cuts & Jobs Act included cost savings that were passed on to low down payment homebuyers in the form of lower private MI premiums.

Private Mortgage Insurance Protects Taxpayers
For nearly seven decades, private MI has served as the first layer of private capital protecting the housing finance system from unnecessary risk. It has proven to be a reliable method for protecting Fannie Mae, Freddie Mac, lenders, investors, and taxpayers from losses, having paid $60 billion in claims since the 2008 financial crisis and housing market downturn. That’s $60 billion covered by private capital rather than taxpayers and the federal government. The private MI industry’s ability to employ risk-based pricing to granularly assess, price, and manage long-term mortgage credit risk also allows private MI companies to serve as a second set of eyes when it comes to managing risk in the system, providing further protection to the government-sponsored enterprises (GSEs) and taxpayers.

The complete 2025 report is available here, along with fact sheets for all 50 states and the District of Columbia.

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USMI is dedicated to a housing finance system backed by private capital that enables access to housing finance for borrowers while protecting taxpayers. Mortgage insurance offers an effective way to make mortgage credit available to more people. USMI is ready to help build the future of homeownership. Learn more at www.usmi.org.