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Home buyers and mortgage shoppers in Washington State have a lot of options when it comes to home loan features. In fact, many borrowers don’t even realize how much flexibility there is within the mortgage industry these days. So we’ve been publishing a series of blog posts on some of these lesser-known financing strategies.
In this article, we’ll look at how you could potentially put less than 20% down when buying a house in Washington, without paying PMI.
There are a lot of misconceptions regarding down payments. One of the biggest misconceptions is that all borrowers need a down payment of 20%, or more, to qualify for a mortgage loan.
According to a New American Funding national survey published on April 21, 2026, 13% of respondents did not know that a 20% down payment was not required. The same survey found that about 20% wished they had known about down payment assistance programs, while 72.6% of respondents put down 10% or less.
The truth is, there are a variety of mortgage options available in Washington State that allow borrowers to put less than 20% down — and sometimes without mortgage insurance.
Private mortgage insurance, or PMI, is a policy that protects mortgage lenders from financial losses resulting from borrowers who default on their loans. Generally speaking, a PMI policy is required in cases where the loan-to-value (LTV) ratio rises above 80%. For instance, if a home buyer makes a down payment of 5% and borrows the remaining 95%, PMI will likely be required.
But there are ways to put less than 20% down in Washington State, while still avoiding PMI. So let’s talk about those financing strategies next.
In a previous article, we talked about the 80/10/10 mortgage strategy for avoiding private mortgage insurance in Washington. This is when the borrower uses two loans to finance the purchase of a home. The first and second mortgage account for 80% and 10% of the purchase price, and the borrower pays the remaining 10% as a down payment.
You’ll recall from earlier that Washington State PMI is usually required when the loan-to-value ratio exceeds 80%. But in the 80/10/10 scenario described above, the LTV on both loans remains at or below 80%. So this is one way to put down less than 20% without PMI.
The 2026 conforming loan limits can affect how some borrowers use an 80/10/10 structure. The FHFA set the 2026 baseline conforming loan limit at $832,750 for one-unit properties in most U.S. counties, up $26,250 or 3.26% from $806,500 in 2025. The high-cost area ceiling for 2026 is $1,249,125, or 150% of the baseline, based on a 3.26% increase in average U.S. home prices between Q3 2024 and Q3 2025 per the FHFA House Price Index.
Piggyback loans are often used to keep a first mortgage at or below the conforming loan limit, which can help a borrower avoid jumbo loan pricing and/or private mortgage insurance. With the higher 2026 limit, some borrowers who previously needed a piggyback structure to stay conforming may now qualify for a single conforming first mortgage instead. An 80/10/10 structure still involves an 80% first mortgage, a 10% second mortgage such as a HELOC, and a 10% down payment, with the second lien typically carrying a higher interest rate because it is subordinate to the first.
The increase in the 2026 limit reduces the jumbo-to-conforming crossover point, so fewer transactions near the old $806,500 threshold may require a piggyback structure to avoid jumbo classification. This impact is generally most noticeable in mid-to-high-priced markets where home prices cluster near the conforming boundary. The 2026 conforming loan limit values apply to original loan amounts rather than outstanding balances and are effective for whole loans delivered and MBS with pool issue dates on or after January 1, 2026.
There are other ways to accomplish this goal as well. Lender-paid mortgage insurance (LPMI) is another common strategy. This is where the borrower agrees to take on a slightly higher rate, in exchange for the lender paying the private mortgage insurance up front. The end result is the same — the borrower can make a down payment below 20% without having to pay PMI.
Another option to consider is how USDA loans are treated for mortgage insurance purposes. In general, some loan programs can let borrowers put less than 20% down without traditional PMI, which is why it is important to compare program structures carefully. Borrowers who are reviewing low-down-payment strategies should ask a lender how mortgage insurance or similar fees are handled for each loan type before choosing the option that best fits their needs.
Washington State has a sizeable military population. So we have to include the VA loan program in this discussion as well. It’s another way home buyers can avoid private mortgage insurance. As an added benefit, this program offers 100% financing, eliminating the need for a down payment. It’s hard to beat the VA program, if you’re a military member or veteran.
This article underscores the importance of speaking to a knowledgeable loan officer or broker, before making any mortgage-related decisions.
There are a lot of financing options available these days. The mortgage industry has become more flexible in recent years, with new loan programs coming onto the market. We encourage borrowers to explore all of their options to find the best “fit.”
Sammamish Mortgage is a local, family-owned company based in Bellevue, Washington. We serve clients across Washington, Idaho, Colorado, Oregon, and California. We offer many mortgage programs and products with flexible qualification criteria, including our Diamond Homebuyer Program, Cash Buyer Program, and Bridge Loans. Visit our website to get an instant rate quote or to use our online mortgage calculator. Please reach out to us if you are ready to get pre-approved for a mortgage.
Yes. Many mortgage programs in Washington State allow borrowers to buy a home with less than 20% down.
No. A 20% down payment is not required for all mortgage loans. Some programs allow much lower down payments.
PMI, or private mortgage insurance, is coverage that protects the lender if the borrower defaults on the loan.
PMI is usually required when the loan-to-value ratio is above 80%, which often happens when the borrower puts down less than 20%.
One option is to use a combination loan structure such as an 80/10/10 mortgage, where the first and second loans help keep the primary loan at or below 80% loan-to-value.
An 80/10/10 mortgage uses a first mortgage for 80% of the home price, a second mortgage for 10%, and a 10% down payment from the borrower.
It can help avoid PMI because the first mortgage stays at 80% of the home’s value rather than exceeding that threshold.
Lender-paid mortgage insurance, or LPMI, is an arrangement where the lender covers the mortgage insurance cost, usually in exchange for a higher interest rate.
Yes. Eligible military service members and veterans can use a VA loan to buy a home without private mortgage insurance.
VA loans can offer 100% financing for eligible borrowers, which means a down payment may not be required.
Whether you’re buying a home or ready to refinance, our professionals can help.
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