Which type of mortgage typically requires no down payment?

Government-backed mortgages are designed to make homeownership more accessible, particularly for first-time buyers and those with limited financial resources. These types of mortgages, such as those offered by the Federal Housing Administration (FHA), the Department of Veterans Affairs (VA), and the U.S. Department of Agriculture (USDA), often do not require a down payment at all or have very low down payment requirements.

For example, VA loans allow eligible veterans and active-duty service members to purchase a home with no down payment, while USDA loans assist low- to moderate-income buyers in rural areas, often with no down payment required. FHA loans typically require a minimum down payment, but it is still a manageable amount compared to many traditional mortgages.

In contrast, conventional mortgages tend to require a down payment ranging from 3% to 20%, depending on the lender's requirements and the borrower's credit profile. Balloon mortgages feature an initial lower payment followed by a larger final payment, and fixed-rate mortgages refer to the interest rate stability over the life of the loan but do not specifically address down payment requirements. Thus, government-backed mortgages stand out as the option that typically allows for the possibility of no down payment.