Which type of mortgage loan requires no down payment for eligible borrowers?

The VA loan is specifically designed for eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. One of the standout features of a VA loan is that it allows these eligible borrowers to purchase a home without requiring a down payment. This benefit is part of the U.S. government’s effort to provide accessible home financing options for those who have served in the military, making homeownership more achievable.

VA loans also typically come with favorable terms, including competitive interest rates and no private mortgage insurance (PMI) requirements, which further enhance affordability for borrowers. This no down payment option is significant because it can alleviate the financial burden for veterans who may have limited savings.

In contrast, conventional loans generally require a down payment that can vary based on the lender's requirements but typically starts around 3% to 5%. FHA loans do require a minimum down payment, generally around 3.5%, aimed at helping lower-income buyers. USDA loans, while they can offer zero down payment options in specific rural and suburban areas, are limited to qualified borrowers in designated locations and income brackets. Thus, the VA loan stands out because of its straightforward no down payment benefit exclusively available to eligible military personnel.