# 80 10 10 Loan: Avoid PMI or a Jumbo Loan in 2026

> How an 80 10 10 loan works in 2026, with payment math at today's average rate, visa-holder availability, and when PMI is cheaper. Run your numbers.

Canonical: https://www.masalaloans.com/blog/80-10-10-piggyback-loan
Author: Apurva Sanghavi
Published: 2026-10-17T18:36:21.572Z
Tags: mortgage, conventional loan, Down Payment, refinance, home buying

**Quick answer (updated October 2026):** An 80 10 10 loan splits your financing into a first mortgage for 80% of the price, a second mortgage or HELOC for 10%, and a 10% down payment. It can avoid PMI, or keep the first loan under the 2026 conforming limit of $832,750 so you skip jumbo underwriting. The second lien usually carries a higher, often variable rate.

You have 10% saved, maybe a little more after the RSU vest in February. The house in Frisco or Fremont costs just enough that 90% financing either triggers mortgage insurance or pushes you over the conforming limit into jumbo territory. Someone at work mentions a "piggyback." Is it smart, or just complicated?

This guide walks through how the structure works, the math at today's average rate, when plain PMI wins, and what visa holders should know about finding a second-lien lender.

## How an 80 10 10 loan works

There are two loans closing on the same day:

- **First mortgage (80%):** Usually a conventional fixed-rate loan. Because the loan-to-value is 80%, there is no PMI.

- **Piggyback second mortgage (10%):** Either a fixed-rate closed-end second or, more commonly, a HELOC. Often from a different lender, often a bank or credit union holding it in portfolio.

- **Down payment (10%):** Your cash, gift money, or sold stock.

Variations exist. An 80/15/5 puts 5% down. A 75/15/10 is sometimes used on condos. The principle is the same: keep the first lien at a level that avoids PMI or stays conforming.

### Two reasons people use it

1. **To avoid PMI without 20 down.** Instead of paying mortgage insurance on a 90% loan, you pay interest on a separate 10% loan.

2. **To avoid a jumbo loan.** If 90% of the price exceeds the conforming limit, splitting it keeps the first mortgage conforming, with conforming guidelines on reserves and documentation. Check your county's figure in our guide to [2026 conforming loan limits in Frisco, Fremont and Irvine](https://www.masalaloans.com/blog/2026-conforming-loan-limits-frisco-fremont-irvine).

## Scenario 1: Avoid PMI on a $900,000 home

*Illustration only.* Say Rohan and Meera, an H-1B and H-4 EAD couple, are buying a $900,000 home in Collin County, Texas, where the 2026 one-unit limit is the $832,750 baseline. They have $90,000 for the down payment plus closing costs set aside separately.

First-mortgage figures use the Freddie Mac weekly average of **7.40%** for October 15, 2026 (illustration only, not a quote or offer). Second-lien rates below are **hypothetical** to show sensitivity. HELOC rates are typically variable and usually higher than first-mortgage rates.

| **Structure** | **First loan P&I** | **Second loan payment** | **PMI** | **Total before taxes/insurance** |
| --- | --- | --- | --- | --- |
| 90% single loan ($810,000) | $5,608 | — | Quote needed | $5,608 + PMI |
| 80/10/10, second at 8.40% (hypothetical) | $4,985 | $630 (interest-only) | None | $5,615 |
| 80/10/10, second at 9.40% (hypothetical) | $4,985 | $705 (interest-only) | None | $5,690 |
| 80/10/10, second at 10.40% (hypothetical) | $4,985 | $780 (interest-only) | None | $5,765 |

How to read it: if the second lien costs 9.40%, the piggyback beats the single loan only if PMI would cost more than about **$82 a month**. At 10.40%, PMI has to exceed about **$157 a month**. PMI pricing depends on score, LTV and the insurer, so get a real quote before deciding.

Two more things the table doesn't show:

- **PMI can be removed.** On a conventional loan, borrower-paid PMI can come off as you pay down or the home appreciates. Our guide on [how to remove PMI from a conventional loan](https://www.masalaloans.com/blog/how-to-remove-pmi-conventional-loan) has the rules.

- **The HELOC can be paid down.** Throw a bonus at the second and its payment drops. That flexibility is the main reason people like piggybacks.

## Scenario 2: Avoid a jumbo loan on a $1,000,000 home

*Illustration only.* Now the home is $1,000,000 in the same baseline county. A 90% loan is $900,000, which is above $832,750 and therefore jumbo.

| **Structure** | **First loan** | **First loan P&I at 7.40%** | **Second loan (interest-only, hypothetical 8.40%–10.40%)** |
| --- | --- | --- | --- |
| 90% jumbo | $900,000 | $6,231 | — |
| 80/10/10 | $800,000 conforming | $5,539 | $700–$867 |

Jumbo pricing doesn't follow the conforming grid, so a real jumbo quote could be higher or lower than this. The bigger issue for many visa holders is eligibility. Jumbo investors often set their own visa rules, reserve requirements and down payment minimums. Our guide to [jumbo loans for visa holders](https://www.masalaloans.com/blog/jumbo-loan-h1b) covers those overlays. Keeping the first mortgage conforming puts you back under Fannie Mae's rule that non-permanent residents are eligible on the same terms as citizens.

**Talk to a loan officer who's seen this before:** Piggyback math changes with every point of PMI and every quarter-point on the HELOC. Send us the price, county and your down payment, and we'll run both structures at today's pricing. Start at [/contact](https://www.masalaloans.com/contact).

## Piggyback second mortgage availability for visa holders

Here's the catch. The first mortgage can be sold to Fannie Mae or Freddie Mac, which don't restrict non-permanent residents beyond requiring lawful presence. The second lien is a different story.

- **Most HELOCs are portfolio loans.** The bank or credit union keeps them, so it sets its own eligibility. Some exclude non-permanent residents. Some require a minimum time left on your visa.

- **Combined LTV limits apply.** Agency guidelines allow subordinate financing on a purchase within the CLTV limits in the Eligibility Matrix, and the second lender will have its own CLTV cap.

- **Both loans must close together.** The first-lien lender has to approve the second, and timing has to match.

- **Your DTI includes both payments.** Lenders count the HELOC payment, sometimes at a fully amortizing figure rather than interest-only.

A broker with access to many first-lien lenders and a working list of second-lien partners that take visa holders saves weeks here.

## When 80/10/10 makes sense and when it doesn't

| **Situation** | **Leans toward** | **Why** |
| --- | --- | --- |
| Large bonus or RSU vest expected within 1–2 years | 80/10/10 | Pay off the HELOC fast, keep first loan clean |
| Strong credit, PMI quote is low | Single loan with PMI | Simpler, one fixed rate, PMI removable |
| 90% would cross the conforming limit | 80/10/10 | Avoid jumbo overlays and reserves |
| You dislike variable-rate debt | Single loan or more down | HELOC rate can rise |
| Short timeline before possible move | Compare carefully | Closing costs on two loans |
| Second-lien lender won't take your visa | Single loan or pledged assets | Structure unavailable |

### Tax angle in 2026

Interest on a second mortgage used to buy your home is generally treated as acquisition debt, within the **$750,000** acquisition-debt cap for loans after Dec 15, 2017. PMI premiums are deductible again for tax year 2026, but the deduction phases out above **$100,000** AGI and disappears above **$109,000**, so many tech households won't benefit. See [mortgage interest and PMI deductions in 2026](https://www.masalaloans.com/blog/mortgage-interest-deduction-h1b-2026) and ask your CPA.

## What the rules actually say

- **FHFA conforming loan limits (announced Nov 25, 2025):** 2026 one-unit baseline $832,750; high-cost ceiling $1,249,125. 2027 limits are expected in late November 2026.

- **Fannie Mae Selling Guide B2-2-02:** Non-permanent residents are eligible for conventional loans on the same terms as citizens. Second-lien eligibility is set by the second lender.

- **IRS Publication 936 (2026 draft):** Mortgage insurance premium deduction reinstated for 2026, phasing out above $100,000 AGI; $750,000 acquisition-debt limit on interest.

- **Freddie Mac PMMS, week of Oct 15, 2026:** 30-year fixed 7.40% (illustration only, not a quote or offer).

## Frequently Asked Questions

**Q: Can H-1B holders get an 80 10 10 loan?**<br />A: Often, yes. The first mortgage can be conventional, where H-1B holders are eligible on the same terms as citizens. The challenge is the second lien, which is usually a portfolio HELOC with its own visa rules. Availability varies by lender, so it pays to shop several second-lien sources.

**Q: Is a piggyback loan cheaper than paying PMI?**<br />A: It depends on two numbers: your PMI quote and the second-lien rate. With strong credit, PMI can be modest and removable later. If the HELOC rate is high, PMI often wins. Run both side by side with real quotes before choosing.

**Q: Can I use an 80 10 10 loan to avoid a jumbo loan?**<br />A: Yes. If 90% financing would exceed your county's conforming limit, keeping the first mortgage at 80% can keep it conforming. In a baseline county in 2026, that works on prices up to about $1,040,000, since 80% of that is near the $832,750 limit.

**Q: Is the second mortgage in an 80/10/10 fixed or variable?**<br />A: Either exists. Many piggybacks are HELOCs with variable rates and an interest-only draw period. Closed-end fixed-rate seconds are available from some lenders. Ask how the rate adjusts and what the payment becomes when the draw period ends.

**Q: Can I refinance an 80/10/10 later?**<br />A: Yes. Common paths: pay off the HELOC with bonuses, or refinance both into one loan once you have 20% equity. Refinancing costs money, so compare the savings against closing costs and your expected time in the home.

## Get a rate-and-payment scenario run at today's pricing

We'll price the single-loan option, the 80/10/10 option and a jumbo option side by side using live pricing from our 150+ wholesale lenders, including second-lien partners that work with H-1B, L-1, O-1 and EAD borrowers. You'll get monthly payment, cash to close and break-even PMI in one page, usually the same day. Have the target price, county, down payment amount and a rough credit score ready. Book a free 15-minute call at /contact, start your application at /apply, or call 713-366-4668.

*Masala Loans is a brand of Matador Lending, LLC (NMLS #2072896). Written by Apurva Sanghavi, President, NMLS #227127. Equal Housing Opportunity. This article is general education, not tax, legal or immigration advice — consult a qualified CPA, attorney or immigration lawyer for your situation. Program availability, rates and terms vary by lender and borrower and are subject to change; not a commitment to lend.*