I think PMI is necessary when the down is less than 20% because if the lender is forced to forclose on the property, the lender doesn’t have the 20% buffer in equity.
With a piggy back loan, the lender of the 80% still has a 20% buffer and any shortcomings in the sale will fall on the 20% lender and the borrower. That leaves the 80% lender safer.
