Yes, and NO.
Yes if you are going with the FHA 203k program, and NO if you are going with the Fannie Mae HomeStyle Renovation program.
If your client it purchasing a home or refinancing a home and wanting money to make improvements and has that little extra down payment and good credit the HomeStyle Renovation program is by far a better program for your client.
PMI can be a major monthly expense but if your client has poor credit or just doesn't have the larger down payment it may be a necessary evil. I hear the PMI can be $400-600 more per month.
In any case if you should have to use the FHA program you will likely refinance your client out of that PMI as soon as possible after the loan has seasoned a bit.
In any case these programs are both excellent to provide money for renovations or needed repairs to a home that otherwise wouldn't be able to be financed.
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