Which loan type typically requires the least down payment?

VA loans typically require the least down payment compared to other loan types. One of the defining features of VA loans is that they are backed by the U.S. Department of Veterans Affairs and are specifically designed for eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. A significant benefit of VA loans is that they often require no down payment at all, which can be a substantial advantage for those who qualify. This feature enables veterans to finance 100% of the home’s purchase price without the need for a down payment.

In contrast, other loan types generally involve some level of down payment. For instance, conventional loans typically require a down payment ranging from 3% to 20%, depending on the borrower’s creditworthiness and the mortgage lender's guidelines. FHA loans, while they are more accessible and designed for lower-income borrowers, still require a minimum down payment of 3.5%. Home equity loans usually involve borrowing against the equity already accrued in a home rather than financing a new purchase, and they also come with specific requirements regarding the equity available, further differentiating them from the initial purchase loan context.

Overall, the ability to secure a loan without a down payment through a VA loan represents a unique benefit that