You cannot use a 401(k) or other retirement accounts as collateral for an outside loan because creditors cannot touch them. You may be able to borrow from your 401(k), but that is generally a bad idea, because you pay back the loan and non-deductable interest with after tax money, which is taxed again when you eventually withdraw the money at retirement. And if you quit that job or are terminated, a 401(k) loan is due immediately, or would be considered a distribution (tax and 10% penalty if under age 59.5). When 80/20 or 80/15 loans were available, the smaller loan was shorter term and much higher interest, which meant total payments for initial years was high. Hopefully if home prices have bottomed and you qualify for a loan at a decent rate and reasonable payments, and can avoid prepayment penalty, you could pay down principal when you can, and get PMI dropped. FHA loans can be as little as 3% down, but they mention also allowing about 3-4% for closing costs. I believe that they have some insurance charge similar to PMI that might be hard to get out of later without refinancing.