What type of loan allows for 100% financing?

The type of loan that allows for 100% financing is the VA loan. This program is specifically designed to assist veterans, active-duty service members, and certain members of the National Guard and Reserves in purchasing homes without the need for a down payment. Since there is no down payment requirement, borrowers can finance the entire purchase price of the home, which is particularly beneficial for those who may not have substantial savings. Furthermore, VA loans typically come with favorable terms, including competitive interest rates and lower closing costs, making them an attractive option for eligible borrowers.

While FHA and USDA loans offer low down payment options and some assistance, they do not provide for 100% financing in the same way that VA loans do. Conventional loans usually require a down payment, depending on the lender's guidelines and the borrower's creditworthiness.