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Piggyback Loans (80-10-10) in California: Two Loans, One Purchase

A piggyback loan uses two loans at once to buy a home — often to avoid PMI or to avoid a jumbo loan. The most common version is the 80-10-10. This page explains how it works and when it helps, in plain language. It is especially useful in high-priced California markets.

The idea: split your financing so you avoid an added cost or a stricter loan type. Let's see how.

Wooden percent blocks under house roofs representing a piggyback 80-10-10 loan structure
Quick answer

A piggyback loan combines a first mortgage and a second mortgage so you put less cash down without paying PMI, or to keep your first loan under the jumbo limit. The classic 80-10-10 means a first mortgage for 80%, a second mortgage for 10%, and 10% down. In California, it is often used to avoid jumbo financing on higher-priced homes.

What this means

Normally, putting less than 20% down on a conventional loan means paying PMI. A piggyback loan avoids that by adding a second loan to cover part of the gap.

In an 80-10-10:

80% is your main mortgage.
10% is a second mortgage (often a HELOC or fixed second).
10% is your down payment.

Because your first mortgage is only 80% of the price, there is no PMI. And because the first loan is smaller, it can sometimes stay under the jumbo limit, keeping easier terms.

Step by step

How It Works (Step by Step)

1
Plan your split. For an 80-10-10, that is 80% first, 10% second, 10% down.
2
Qualify for both loans. The lender reviews your credit and income.
3
Avoid PMI. Since the first loan is at 80%, no PMI applies.
4
Possibly avoid jumbo. A smaller first loan may stay under the limit.
5
Close on both. The two loans fund together.
6
Repay both. You make payments on the first and second loans.

Common Variations

StructureFirstSecondDown
80-10-1080%10%10%
80-15-580%15%5%
75-15-1075%15%10%

The second loan is often a HELOC or a fixed second mortgage. See HELOC.

How It Helps in California

Because California home prices are high, many buyers cross the 2026 conforming limit ($832,750, up to $1,249,125 in high-cost counties). A piggyback can keep your first mortgage under that limit, avoiding jumbo rules. See High-Balance (County Limits) and Jumbo.

Requirements (At a Glance)

RequirementTypical piggyback rule
Credit scoreOften 680+ (varies)
Down paymentOften 5%–10%
Two loansYou must qualify for both
Second loan rateOften higher than the first
PropertyUsually your primary home

Benefits

No PMI. The first loan stays at 80%.
Avoid jumbo. Keep the first loan under the limit.
Less cash than 20% down. Buy with 5%–10% down.
Flexible second loan. Often a HELOC you can pay down.

Potential Drawbacks (The Honest Part)

Two payments. You owe on both loans.
Higher second-loan rate. The second is usually pricier.
More complex. Two loans mean more to manage.
Variable risk. If the second is a HELOC, its rate can change.
Qualifying for both. You must meet requirements on each.
Real-world California examples

What it looks like in practice

Example 1 — Avoiding PMI in Sacramento.
Example 1 — Avoiding PMI in Sacramento.

Maria puts 10% down using an 80-10-10. Her first loan is at 80%, so she avoids PMI, and she pays down the 10% second loan over time.

Example 2 — Avoiding jumbo in Orange County.
Example 2 — Avoiding jumbo in Orange County.

Marcus buys a higher-priced home. A piggyback keeps his first mortgage under the limit, avoiding jumbo rules. See Jumbo.

Example 3 — HELOC as the second in San Jose.
Example 3 — HELOC as the second in San Jose.

The Lee family uses a HELOC as their 10% second loan, planning to pay it down quickly. See HELOC.

Examples are for learning only. Your structure depends on your finances and the home.

Common mistakes

1Forgetting the second payment. You owe on both loans.
2Ignoring the second-loan rate. It is usually higher.
3Overlooking variable risk. A HELOC second can adjust.
4Assuming it is always cheaper than PMI. Compare the total cost.
5Not comparing to high-balance. Sometimes that is simpler. See High-Balance (County Limits).
6Skipping the math. Compare piggyback vs PMI vs jumbo.
Good questions

Frequently asked questions

Using two loans at once — a first and a second mortgage — to buy a home, often to avoid PMI or jumbo financing.

Next steps

Find the lowest-cost path

A piggyback can be a smart way to avoid PMI or jumbo financing, but you take on two loans. Compare it against PMI and a high-balance loan. EZ Online Mortgage can run a piggyback against PMI and jumbo so you can see the lowest-cost path.

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Keep learning

This page is for education only. It is not a loan offer or a promise of approval, rates, or terms. Qualification depends on your individual circumstances. Equal Housing Opportunity · NMLS #362311 · CA DRE #01871814.

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