California Real Estate Practice Exam

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Which of the following types of financing generally does NOT require any down payment?

Cal-Vet
Conventional
FHA
VA

The correct answer is: Cal-Vet

The type of financing that generally does not require any down payment is typically associated with VA loans. VA (Veterans Affairs) loans are specifically designed for eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. One of the primary features of VA loans is that they allow qualified borrowers to finance up to 100% of the home's purchase price, which effectively eliminates the need for a down payment. While Cal-Vet loans may also have down payment options that can be favorable for veterans, they are less universally known for no down payment compared to VA loans. Conventional loans generally require a significant down payment, often around 20%, though there are some conventional loan programs that may allow for as low as 3% down, depending on the lender and borrower qualifications. FHA loans also have minimum down payment requirements, typically around 3.5%, for borrowers with a credit score of 580 or higher. In summary, VA loans provide veterans with the opportunity to purchase a home without the burden of a down payment, making them a popular choice for those who qualify.