no...the risk of default and foreclosure must be mitigated.
yes....if you have LPMI (Lender Paid MI) and accept a higher interest rate that has the MI built into the rate forever.
USDA RD loans have a .4% monthly fee that is assesed in conjunction with its RD fee to insure against the risk of default. While it may not be called MI it works as such. Property and income must be eligible. The USDA website is below...
The risk of default goes higher with low down payment loans. The bank has to be sure someone will pay if this happens.
If tou find an institution doing it I would like to have their information.
I have a buyer on new construction with a 3.5% down payment and no pmi closing this month, but keep in mind usually there are other ways for the lender to make money, ie slightly higher fees and or interest rates. Local banks sometimes have very unique programs depending on the area, and or occupation etc.
I've not heard of any loans that aren't going to require PMI with so little down, other than through State Employees Credit Union which if you have access to using would be who I would suggest speaking with. Even they may require some sort of PMI.
Good luck, I'll be interested in seeing what some local lenders have to say in their response. Might be I'll learn something new and useful.