Including PMI is acceptable if it will be paid out of escrow. Take a look at question 3: https://portal.hud.gov/hudportal/HUD?src=%2Fprogram_offices%2Fhousing%2Framh%2Fres%2Frespafaq#TEM
Also see 12 CFR 1024.17(c)(1) which states “…In addition, the servicer may charge the borrower a cushion that shall be no greater than one-sixth (1/6) of the estimated total annual payments from the escrow account.”