10% Down Payment Mortgage

Mortgage and Lending with Guaranteed Rate, Marin County, CA NMLS: 22343

10% Down Payment Mortgage


But I don’t get it. 2020 started just like the many of the years that preceded it. Sure, there was a seasonal slowdown in home buying activity as we got through 2019’s holiday season and got the new year underway, but with interest rates at historic lows, a strong seller’s market in the San Francisco Bay Area and lots of buyer competition for any desirable home that came on the market, it looked like deja vu all over again for anybody looking to purchase a home. In other words, here we go again with having to come up with a large down payment (or even all cash), a push to offer without any contingencies in your contract and a general sense that it was going to take an act of God to actually get into contract.


Well, we got the act of God part. Just not the one that any of us, save for the disbanded Global Health Security and Biodefense Unit, had planned on…


So, here we are, going into the heart of the spring buying season, in the middle of shelters-in-place and a COVID-19 pandemic. Yet with all due respect given to the very real health concerns most of us share, real estate is an essential activity and some buyers and sellers have no choice but to be “on the market.” For a handful of these buyers, who are not yet in a position to have saved a full 20%, or who have seen the value of their stock portfolios decimated by recent market volatility, a 10% down payment may be the only realistic way to purchase a home during the months to come.


The good news is that they can still do it.


“What is 80-10-10 Financing?”

I remember my grandmother calling the refrigerator a “Frigidaire” and our jeans “Dungarees.” So it is with 80/10/10 financing. It’s sort of the brand name we bandy about when what we’re really discussing is a concept, and the manifestation of that concept is subordinate financing, AKA as a “piggyback loan.” Most simply described, a buyer using this structure will be obtaining two loans instead of one in the purchase of a home. This is often referred to in broad strokes as an “80-10-10” loan.


“How Do 80/10/10 Loans Work?”

When we say “80/10/10” we are specifically implying the following:

  • A first mortgage to 80% of the home’s purchase price.
  • A second mortgage equal to 10% of the home’s purchase price.
  • A buyer’s down payment for the remaining 10% of the purchase price.

Since the lending world is replete with guidelines, it doesn’t always play out exactly this way, and for any number of reasons. Just keep in mind that “80-10-10” could also just as easily be 75-15-10, or sometimes when we need to use a conforming first mortgage, you could even see a 62-28-10, for example. You get the idea, we don’t always have to be at a strict 80% and 10% for the loan amounts. But no matter how we structure the transaction, the sum of both loan amounts plus the down payment will equal 100% of the purchase price.


“Can I Qualify for a Piggyback Mortgage”

When obtaining a jumbo 80-10-10 loan, the first mortgage will typically be a fixed rate loan (30-year fixed) or a hybrid ARM (10/1 ARM, 7/1 ARM or 5/1 ARM). The second mortgage is most often a home equity line of credit (HELOC). There can be different qualifying criteria for both loans and your loan officer will have to navigate two sets of guidelines in most cases. Not all loan originators are adept at subordinate financing but for my clients, the pre-approval process for a piggyback loan is identical to the process for obtaining a single loan — we understand it on every level. While an 80-10-10 can sometimes be harder to obtain than a single loan, there are also cases where it can enable an approval that otherwise would not exist. For example, a buyer may not qualify for a single loan of $750,000, but may pass with flying colors if the loan is restructured as a first mortgage of $625,000 and a second loan of $125,000. Same total sum borrowed, but two very different outcomes.


In a very uncertain time, we presently have the capacity to allow a buyer to make a 10% down payment, using the 80-10-10 structure, on a purchase price almost as high as $2,200,000. And here in the San Francisco Bay Area, this is not an uncommon scenario. Sellers may not have the luxury of waiting around to get multiple offers in a market defined by the great uncertainty we all face today. But in these challenging times of being shut in, will lie opportunity for the buyer who may have previously been shut out. If I can help you better understand the inner workings of a 10% down payment mortgage option, we are available and open for business.


Take care and stay safe,



Robert J. Spinosa
Vice President of Mortgage Lending

Guaranteed Rate
NMLS: 22343 
Cell/Text: 415-367-5959 


Marin Office:  324 Sir Francis Drake Blvd., San Anselmo, CA  94960

Berkeley Office:  1400 Shattuck Ave., Suite 1, Berkeley, CA  94709

*The views and opinions expressed on this site about work-related matters are my own, have not been reviewed or approved by Guaranteed Rate and do not necessarily represent the views and opinions of Guaranteed Rate.  In no way do I commit Guaranteed Rate to any position on any matter or issue without the express prior written consent of Guaranteed Rate's Human Resources Department.


Guaranteed Rate. Illinois Residential Mortgage Licensee NMLS License #2611 3940 N. Ravenswood Chicago, IL 60613 - (866) 934-7283



Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Joseph Doohan 04/07/2020 12:50 AM
Home Buying
California Alameda County Berkeley
The Lounge at Active Rain
Posts to Localism
Oakland Real Estate
Addicted to Active Rain
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Anna Banana Kruchten Arizona's Top Banana!
HomeSmart Real Estate BR030809000 - Phoenix, AZ

Rob I am very familiar with 80/10/10 and other variations.   My first years in the biz in the late 80's early 90's the AZ market was having it's issues and it was very common for an 80/10/10 and at times the 10 was a seller carry back of some kind.  They came back into play in 08-10 and I had to review the language/terms and work closely with title agent (who was very familiar with this animal as well) to make sure it was spelled out correctly. And here we are once again, hopefully for a shorter period of time - giving buyers an opportunity to buy a home they need/want and sellers to sell and move forward with their lives.

Apr 05, 2020 10:06 AM #1
Carol Williams
Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals. - Wenatchee, WA
Retired Agent / Broker / Property Manager

Hi Rob,
I am a big fan of loan options as long as they are truly in the best interest of the buyers and not predatory.  There are multiple ways of structuring loans to work in changing times.  Everyone's situation is a little different and it's good to have flexibility.

How can seller-assisted financing play out in today's environment? I realize that can be risky for the seller, being in the subordinate position but, as they say, where there's a will there's a way.

Apr 05, 2020 11:52 AM #2
Lynn B. Friedman
Atlanta Homes ODAT Realty Call/Text 404-939-2727 Buckhead - Midtown - Westside -- and more ... - Atlanta, GA
Concierge Service for Our Atlanta Sellers & Buyers

Rob Spinosa 
Thanks for a wonderfully clear explanation. Working on one of these with AR member Rodney Mason right now. Added benefit, of course, no PMI monthly.
All the best - Lynn

Apr 05, 2020 03:49 PM #3
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Sounds pretty good if you can swing it. Once we get out of this thing, that’ll be a good deal for someone. :)

Apr 05, 2020 11:06 PM #4
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

I do like wonderfully clear explanations in the same way. We can use as much clarity as we can get these days. Cc Lynn B. Friedman

Apr 05, 2020 11:10 PM #5
James (Jim) Lawson, DBA
DomainRealty.com LLC - Bonita Springs, FL
Broker Associate, RSPS, BPOR, HI & PE

Very interesting Rob and well explained. Saw a zero down 4.875%, 30 year fixed, no PMI with a minimum 620 FICO two weeks ago at NFCU. Don't remember the borrowing limit which in some markets is a stopper.

Folks these days have had lots of choices. The question is what is the residential lending market going to be after the Corona virus gets under control?

Apr 06, 2020 12:41 AM #6
AndreaBFerreira CRS - SRS - CLHMS
Keyes Co. - Davie, FL
Miami Dade, Broward and Palm Beach County in FL

For this scenario, would buyer paying more for closing costs? 2 loans =2 closing cost? What would be the average increase? Thank you for sharing 

Apr 06, 2020 05:28 AM #9
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

I am all for helping the buyer who truely needs help and can qualify for it. The 80/10/10 works well in an appreciating market when they can refi a 1-2 years down the road and get a single mortgage, With what we have now, i would not be comfortable with a buyer using it. I listed and sold a great deal of REO 2007-2017 and the majority of the early foreclosures were people with these types of loans who just walked away when the home was worth less than the 2 mortgages they owed. I also did short sales that were a neightmare dealing with the second lender who often wiped out who would not go away without something, 

Apr 06, 2020 06:22 AM #10
Sam Shueh
(408) 425-1601 - San Jose, CA
mba, cdpe, reopro, pe

Buyers need to make sure the lender they deal with will fund money. We have the Covid 19 disclosures and forms to extend the contract. However, if the lenders are hesitating, we offer the offer to lenders who are serious.  Last transaction took 6 weeks on a 10%(90% down) arguing the owner had too much equity not disclosing other income sources. 

Apr 06, 2020 07:33 AM #13
Lottie Kendall
Compass - San Francisco, CA
Helping make your real estate dreams a reality

Rob, you've written another fabulous post for consumers -- I'll be sharing it with some. Thank you!

Apr 06, 2020 11:08 AM #16
Patricia Feager, MBA, CRS, GRI,MRP
Selling Homes Changing Lives

Rob Spinosa - Thanks for the timely newsflash! As they say, it's always something. As in show business, the show must go on and people find a way.  Congratulations on your FEATURE! This is very helpful!

Apr 06, 2020 04:38 PM #17
Jeff Dowler, CRS
eXp Realty of California - Carlsbad, CA
The Southern California Relocation Dude

Hi Rob:

More great education for us and for potential buyers! Thank you!


Apr 06, 2020 07:37 PM #18
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great week.

Apr 07, 2020 04:14 AM #19
Erik Hiss
Keller Williams Capital Partners Realty - Worthington, OH
You can trust me for all your real estate needs!

It's been a while since we have seen the 80-10-10 here in Central Ohio, but it's certainly something I'm familiar with. Looking forward to see what the future holds!

Apr 08, 2020 05:16 AM #22
Michael J. Perry
KW Elite - Lancaster, PA
Lancaster, PA Relo Specialist

This save quite a bit of money by avoiding PMI !!!! Would seller assist allow 6% 

Apr 08, 2020 11:26 AM #23
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Rob Spinosa

SVP of Mortgage Lending, Marin County
Can I Get a Jumbo Loan with 10% Down?
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