Definition of piggyback loans

second mortgage loans "piggybacked" onto first mortgages after home improvements have added value or, in a rapidly inflating housing market, to compensate for a small or nonexistent down payment and save the higher expense of Private Mortgage Insurance (PMI). The first and second loans, which close simultaneously, typically represent 80% and 10% of home value, respectively, with the remaining 10% a down payment, hence the term, "80-10-10s." Some lenders, however, will allow the piggyback loan to represent 20% and some will structure it as a homeowner's equity account.