In Pennsylvania, is it legal to lend more than 80% of the value on residential real estate without requiring private mortgage insurance?

Yes. PA Act 89, signed into law on Nov. 29, 2000, allows parity with federal banks. For loans under $100,000, up to 100% LTV is allowed. 100% is also allowed if PMI or an acceptable guarantee is obtained for loans > 90% LTV. See
the PA Department of Banking web site under On-line Resources, Secretaries Letters, select your charter, November 29, 2000. www.banking.state.pa.us/PA_Exec/Banking/resource/sectlett/112900.PDF

Prior to the passage of this law, 7 P.S. 505 restricted LTV on real estate.

I suggest you contact your attorney for further explanation. I hope this helps.

Any opinion expressed above is personal, not intended as legal advice, certainly not the opinion of my employer, and may be worth as much as it cost.

thanks doug.