Abstract:Efficiently adapting large foundation models is critical, especially with tight compute and memory budgets. Parameter-Efficient Fine-Tuning (PEFT) methods such as LoRA offer limited granularity and effectiveness in few-parameter regimes. We propose Wavelet Fine-Tuning (WaveFT), a novel PEFT method that learns highly sparse updates in the wavelet domain of residual matrices. WaveFT allows precise control of trainable parameters, offering fine-grained capacity adjustment and excelling with remarkably low parameter count, potentially far fewer than LoRA's minimum -- ideal for extreme parameter-efficient scenarios. In order to demonstrate the effect of the wavelet transform, we compare WaveFT with a special case, called SHiRA, that entails applying sparse updates directly in the weight domain. Evaluated on personalized text-to-image generation using Stable Diffusion XL as baseline, WaveFT significantly outperforms LoRA and other PEFT methods, especially at low parameter counts; achieving superior subject fidelity, prompt alignment, and image diversity.