🏠 The Lending Letter

Tuesday, February 17, 2026 — Markets Are Back. Let's Get It.

Good morning! 🌅 Banks are open, bonds are trading, and the mortgage world is back in full swing after Presidents' Day. Rates barely flinched over the long weekend — and now all eyes are turning toward Wednesday's FOMC minutes release, which could be the first real rate catalyst of the week. More on that below. First — your numbers. 👇

Flat. Calm. Unbothered. 😌 With bond markets digesting the long weekend and traders returning to their desks this morning, Treasuries opened with minimal movement — and mortgage rates followed suit. Today's steady rate reflects a market in a wait-and-see mode before tomorrow's data drops.

If you have a purchase in the pipeline, today's window is as good as any. Lock-or-float decisions get a lot harder after Wednesday. More on that in the market outlook below. ⬇️

🎓 TODAY'S EDUCATION: The Piggyback Loan Trick — How to Dodge PMI Without 20% Down 🐷

Here's a question: Would you rather pay an extra $375/month for the privilege of having less than 20% down... or pay $0 in PMI by being a little creative with your financing structure? 🤔

If you picked $0 — congrats, you just discovered the piggyback loan. Also known as an 80-10-10, this strategy has quietly made a comeback as buyers look for ways to preserve cash without getting hit with Private Mortgage Insurance every single month.

🔍 What Exactly Is a Piggyback Loan?

The name tells you everything about the structure:

• 🔵 80% — First mortgage (your standard home loan)
• 🟡 10% — Second mortgage (a HELOC or home equity loan that "piggybacks" on top)
• 🟢 10% — Your down payment (the cash you bring to closing)

By splitting the financing this way, your primary mortgage never exceeds 80% of the home's value. And PMI? Not required at 80% LTV or below. Problem solved. 🎉

💡 Let's Run the Numbers

Say you're buying a $500,000 home and have $50,000 (10%) saved:

Over 5 years, that's roughly $14,500 back in your pocket just from structuring the loan differently. According to Bankrate, piggyback loans have made a notable comeback as buyers in today's rate environment try to preserve cash while sidestepping PMI.

⚠️ The Catches (Because There's Always a Catch)

1. The second loan's rate is higher.
HELOCs are typically variable and run 1–3 points above a standard mortgage rate. If the second loan's rate is steep enough, the PMI savings can actually flip — and PMI might end up being cheaper. Always model both scenarios.

2. You're qualifying for two loans.
Lenders want solid credit — ideally 700+ — and a healthy debt-to-income ratio. The second mortgage payment factors into your DTI, which can tighten how much house you qualify for. The CFPB recommends carefully comparing total costs of both structures before committing.

3. PMI can actually be tax-deductible.
Depending on your income and filing status, PMI deductions might shrink the real cost difference between the two options. Check with a tax advisor before assuming the math is clear-cut.

4. More paperwork, sometimes two closings.
Both loans often come from the same lender, but not always. Be prepared for extra documentation and potentially a slightly more complex closing process.

🎯 Who Should Consider This?

The piggyback works best if you: have solid credit (700+), are buying in a stable or appreciating market, and can handle a higher blended payment while still coming out ahead vs. PMI. Per NerdWallet, using a mortgage calculator to model both side-by-side before committing is essential — the math is your best friend here. 🧮

Want to see if the 80-10-10 structure works for your situation? Drop your info here and we'll connect you with a lender who can model it out. No pressure, just numbers.

🏡 STR Investor Corner: Presidents' Week Isn't Over Yet 🎉

Here's something a lot of STR owners underestimate: Presidents' Week — not just Presidents' Day. Many school districts across the Northeast and Mid-Atlantic take the entire week of February 16–20 off. If you have a ski cabin, beach house, or family-friendly rental within driving distance of any major metro, your calendar should still be filling up.

• 📅 Mid-week gaps: Most STR owners only price aggressively on weekends — leaving Tuesday-Thursday revenue sitting on the table. Dynamic pricing tools like PriceLabs or Wheelhouse can auto-adjust for demand spikes like this week.
• 📸 Last-minute drop: If you still have open nights this week, a 10-15% price reduction can flip an empty calendar to a full one fast. Occupied beats vacant every time.
• 💬 Guest communication: Holiday weeks mean higher guest volume. Pre-schedule check-in messages and local recommendations now to stay ahead of the inbox flood.

Looking to finance your next Airbnb or short-term rental? Connect with our STR loan specialist here — they know DSCR underwriting, STR income qualification, and all the nuances that trip up regular lenders. And if your property is already generating solid income, a cost segregation study could unlock serious tax savings — often five figures or more. 💸

💡 Personal Finance Hack: T-Bills — The Government Is Basically Paying You to Park Cash 🏦

High-yield savings accounts get a lot of love. Rightfully so. But if you have cash you don't need to touch for 4, 8, 13, or 26 weeks, Treasury Bills (T-Bills) are frequently outperforming HYSA rates — and they come with a tax advantage most people completely miss.

📜 What Is a T-Bill?

T-Bills are short-term U.S. government debt with maturities from 4 weeks to 52 weeks. You buy them at a slight discount to face value; at maturity, you get the full face value back. The difference is your return. They're backed by the U.S. government — about as safe as it gets. Per TreasuryDirect.gov, you can buy them directly with zero broker fees starting at $100.

🎯 The Hidden Tax Advantage Nobody Talks About

T-Bill interest is exempt from state and local income taxes. For someone in a high-tax state like California (13.3% top rate), New York (10.9%), or New Jersey (10.75%), this matters — a lot.

⚙️ How to Actually Do This

Option 1: TreasuryDirect.gov — Buy directly from the U.S. government. Zero fees, weekly auctions, complete control. Slightly less convenient but maximum yield retention.

Option 2: Brokerage account — Fidelity, Schwab, and Vanguard all let you buy T-Bills at auction or on the secondary market. Easy interface, same securities, no extra fees.

Option 3: T-Bill ETF — SGOV or BIL give you daily liquidity and hold a rolling basket of short-term Treasuries. You lose a portion of the state-tax exemption, but you gain flexibility for in-and-out moves.

Pro tip: Build a T-Bill ladder. Instead of dumping everything into one bill, buy 4-week, 8-week, 13-week, and 26-week T-Bills simultaneously. As each matures, you have rolling liquidity while still capturing higher yields on longer durations. According to Bankrate, laddering is one of the most underutilized cash management strategies among everyday investors. 📊

Bottom line: if your emergency fund or short-term savings is sitting in a regular bank account earning 0.01%, you're leaving real money on the table. T-Bills aren't sexy. But earning more for doing nothing? That's the whole point. 😏

📡 This Week on the Economic Radar

Markets are eyes-wide-open heading into the back half of the week. Here's what could move rates:

• 💼 Wednesday, Feb 18:FOMC Meeting Minutes from January's Fed meeting are released. Markets will dissect every sentence for clues on the timing of future rate cuts — or whether the Fed is in full pause mode. This is the headliner tomorrow. 🎯
• 📈 Thursday, Feb 19:Weekly jobless claims — the labor market has been stubbornly strong, which reduces the Fed's incentive to cut rates. A soft reading here could help mortgage rates drift lower.
• 📊 Friday, Feb 27:January PPI (Producer Price Index) drops, per the U.S. Bureau of Labor Statistics. After last week's hotter-than-expected CPI, the PPI will be closely watched for confirmation of the inflation trend. Circling that one on the calendar now. 🗓️

If you've been floating a rate, Wednesday is the day to have a game plan ready. The FOMC minutes alone can jolt bond markets in either direction — and mortgage rates tend to follow quickly. 🔐

📝 Tuesday Homework Assignment (Pick Your Lane)

For Active Home Buyers 🏠

Ask your lender to run both scenarios side-by-side: standard mortgage with PMI vs. an 80-10-10 piggyback structure. Get the monthly breakdown and total 5-year cost for each. The math might genuinely surprise you. If you need a lender to run those numbers, start here. 😉

For Real Estate Investors 📈

Review your cash holdings. If you're sitting on down payment reserves or capital earmarked for a future deal, consider moving a portion into a T-Bill ladder. Your money earning 4%+ while you wait beats it sitting idle. When the right deal appears, you redeploy. And if you're ready to act on your next investment property, let's start the conversation now.

For Everyone 💼

Open a TreasuryDirect.gov account if you don't already have one. It takes 10 minutes. Buy a single 4-week T-Bill with $500 or $1,000 just to understand the mechanics. You'll be surprised how painless it is and how much better it treats your cash vs. a traditional bank savings account.

For STR Owners 🏡

Check your Presidents' Week calendar right now. If you have mid-week gaps, drop the price and fill the nights. Also — if your listing is sitting at a 4.7 but should be at a 5.0, the answer is usually décor, amenities, or a small renovation. We have a 0% interest funding option for exactly that. Worth a look. 🛋️

🎬 Bottom Line

Rates are steady at 6.04%, markets are back open, and the next catalyst is 24 hours away. That makes today a genuinely useful window to plan. Two things worth taking seriously today:

• 🐷 Piggyback loans — a creative financing structure that could save you $242/month by structuring your mortgage smarter
• 🏦 T-Bills — a simple, government-backed way to earn meaningfully more on cash you're already holding, with a state-tax bonus most people never claim

The people who build wealth in real estate aren't always the ones with the biggest checks. They're often the ones who know how to structure things smarter than everyone else at the table. That's exactly what The Lending Letter is here for. 📬

Whether you're buying your first home, scaling a rental portfolio, or just making sure your cash is working as hard as you are — we've got you covered. See you tomorrow for the FOMC meeting minutes breakdown. 👋

The Lending Letter
📬 Mortgage rates move fast. So do we.
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See you tomorrow (Wednesday, February 18) — FOMC minutes day! 🌟

Disclaimer: This newsletter is for informational and entertainment purposes only. Rates and terms vary by lender, borrower qualifications, and market conditions. Piggyback loan strategies involve unique qualification requirements, dual-loan underwriting, and cost comparisons that vary by situation. Treasury Bill returns are subject to federal income tax and market fluctuations. Always consult with licensed mortgage professionals, tax advisors, and financial planners for your specific circumstances. Past performance doesn't guarantee future results.