Q1. A Colorado borrower is refinancing and wants to avoid private mortgage insurance (PMI). Which of the following conditions must be met according to Colorado lending practices and FHA guidelines?

• ○The borrower must have at least 20% equity in the property or refinance into an FHA streamline refinance with existing mortgage insurance.
• ○The borrower must pay off the existing mortgage entirely and apply for a new conventional loan with no PMI requirement.
• ○The borrower can refinance regardless of equity but must pay upfront PMI premiums to avoid monthly PMI.
• ○The borrower must refinance through a USDA loan program to eliminate PMI regardless of equity.