Which statement is NOT true regarding loans that require private mortgage insurance?

The statement about obtaining a conventional loan for up to 95% of the property's appraised value is accurate and reflects common lending practices. Conventional loans often allow buyers to finance a significant portion of a home's value, typically up to 80% without requiring private mortgage insurance (PMI). However, for loans exceeding 80% of the appraised value, PMI becomes necessary. This insurance protects the lender by covering a portion of the loan amount in the event of default.

The mention of PMI satisfying the insurance requirements for the upper 20 to 25% of the loan highlights how it secures the lender's investment on loans perceived as higher risk due to lower equity stakes from the borrower. PMI premiums feature prominently among the monthly mortgage payments, integrating into the overall cost of borrowing for the homebuyer.

Lastly, the assertion that insurance must generally be held for two years is not a standard rule. This varies considerably based on the loan terms and the lender’s policies, as some borrowers can eliminate PMI sooner by reaching a certain equity threshold or refinancing their loans.

For these reasons, the original statement about the capability to acquire a conventional loan up to 95% of the property’s appraised value remains valid, thus illustrating its reliability within conventional lending parameters.