Which loan type requires the least amount of down payment from the borrower?

The loan type that requires the least amount of down payment from the borrower is VA loans. These loans are designed for eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. One of the standout features of VA loans is that they do not require any down payment at all, making homeownership more accessible for those who have served in the military. This benefit enables borrowers to finance 100% of the home’s value, which is a significant advantage compared to other loan types.

In contrast, conventional loans often require a down payment that can range from 3% to 20% of the home's purchase price, depending on the lender's requirements and the borrower's financial situation. FHA loans typically require a minimum down payment of 3.5%, which, although lower than many conventional loans, still necessitates some upfront investment. USDA loans are aimed at rural property buyers and generally require no down payment as well, but there are specific eligibility criteria based on income and location that may restrict access.

Therefore, the unique benefit of VA loans—requiring no down payment—positions them as the optimal choice for borrowers seeking to minimize initial cash outlay when purchasing a home.