piggyback loan

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Piggyback Loan

A loan for a portion of the value of a home over and above the traditional mortgage. In general, one must have a 20% down payment to purchase a home and one finances the remaining 80%. A piggyback loan allows one to borrow at least a portion of the remaining 20% (though at a higher interest rate than the remainder of the mortgage). A piggyback loan is an alternative to private mortgage insurance. It may allow more people to purchase their own homes.

piggyback loan

A combination of a construction loan and a permanent loan commitment.

References in periodicals archive ?
Additionally, the rate of creative financing like second mortgages or piggyback loans, which are typically used to avoid paying mortgage insurance, fell in the quarter.
The survey also found that 62 percent of overall industry respondents and 76 percent of lender-only respondents said they did not believe piggyback loans pose a threat to the stability of the mortgage industry.
Piggyback loans can be used by borrowers to avoid having to pay for private or government mortgage insurance.
Prime was two percent, unemployment was at record levels, my piggyback loans averaged about 18 percent and FHA and VA loans were at 17 percent and four-five points.
In recent years, homebuyers in New York took out subprime loans at rates higher than most other large cities and increasingly relied on piggyback loans, leaving our homebuyers highly leveraged and vulnerable to default.
4062 restores the maximum loan size to $2 million and allows piggyback loans.
The 7(a) program was shut down for a week in January and SBA imposed the $750,000 cap and a ban on piggyback loans because it feared the program would run out of money.
The year-over-year increase was driven by increased volumes and deteriorating credit performance mainly in two products - higher LTV subprime loans and 80/20 piggyback loans - which we have substantially eliminated from our product offerings through recent guideline cutbacks.
However, as can be seen from the table, much of the change, particularly since 2008, reflects substitution among high-LTV credit enhancement alternatives, including nonconventional FHA and VA loans and junior-lien piggyback loans.
Using the rigorous analytical method known as survival analysis, the study showed that, for each variable, low down payment loans with mortgage insurance had significantly lower delinquency rates than uninsured piggyback loans.