This is commonly (and incorrectly) known as the “dollar down loan.” VA loans are specifically for those who have served in the armed forces. Rates are great, there is no mortgage insurance, per se, but there is the VA Funding Fee (typically 2.15%) which is financed into the loan amount. Additionally, VA offers true 100% financing up to the conforming conventional loan limit ($424,100 in most of the country). If the cost of the home is greater than that amount, the borrower is required to put down 25% of the difference. Hence, if a person who qualifies for a VA loan is purchasing a home for $524,100, they would have to put down 25% of $100,000 (the difference between $524,100 and $424,100). This loan shares some characteristics of both conventional loans and FHA. As much as possible, VA underwriters want to find ways to help the veterans qualify for mortgages; like all loans there are limitations, but short of a few hard stops, loan officers and underwriters do everything possible to get those who have served into a home.
Between my love of working with those who have served in the armed forces and the fact that this loan can do so much for the borrower, I think this is the best loan for those who qualify. Like FHA, a VA loan is only for the purchase of a primary residence.