Homebuyers looking for help in obtaining a down payment or covering closing costs are increasingly turning to piggyback financing, according to a recent post on CoreLogic’s blog.

Piggyback loans are second mortgages that are borrowed at the same time as the first mortgage. This form of a home equity loan allows homebuyers to pay for some, or all, of the upfront costs of buying a home, including the downpayment, closing costs and interest rate buydowns. It can also be used for property renovations.

Yangling Mayer, CoreLogic’s principal economist, wrotre that piggybacks are also known as “80-10-10” loans because borrowers combine a 10% cash down payment with a 10% piggyback loan and an 80% mortgage. By using 10% cash and a 10% piggyback loan to reach the 20% down payment threshold, a homeowner would avoid private mortgage insurance and potentially save money even when combining both loans.

As housing prices have skyrocketed in recent years, the demand for piggyback loans has increased. In August, 6.7% of homebuyers who financed their home purchase with a conventional mortgage or government-insured FHA loan had also simultaneously taken out a piggyback mortgage.

Piggybacks were much more popular with homebuyers using FHA loans. As of August, 21.2% of FHA purchase loans recorded a piggyback second, a 20-year high, per Mayer. That figure is up from 18.1% in June. Among conventional loans, the number with a concurrent piggyback loan has doubled to 4.4% in the just the past two years.

Piggyback mortgage lenders are more frequently state or local housing finance agencies, community organizations and nonprofit organizations. In fact, this type of loan has earned the nickname “community seconds,” because much of the funding is sourced by local housing authorities and community organizations.

Mayer points out that government-sponsored agencies, such as Fannie Mae and Freddie Mac, will back the primary mortgage that has a subordinated community second on the condition that certain requirements and underwriting standards are met, including that the interest rate on the second loan cannot exceed the first.