Which loan type typically requires no down payments?

A VA loan is a type of mortgage that is specifically designed for eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. One of the most significant benefits of a VA loan is that it typically requires no down payment, allowing eligible borrowers to finance 100% of the purchase price of the home. This feature makes it an attractive option for those who may not have the savings for a traditional down payment, providing easier access to homeownership for veterans and service members.

In contrast, conventional loans usually require a down payment, which can range from 3% to 20% of the purchase price, depending on various factors such as credit score and loan amount. FHA loans, while they have a lower down payment requirement (as low as 3.5%), still necessitate some initial payment from the borrower. Construction loans, generally used for building new homes, also require down payments and are tied to the total cost of construction rather than the purchase of an existing property. This further distinguishes the VA loan as a unique option that aligns with the needs of those who have served in the military.