To obtain a 1005 loan with no down payment, a borrower is most likely to use which type of loan?

A borrower seeking a 1005 loan with no down payment would most likely choose a VA loan because these loans are specifically designed to assist veterans, active duty military personnel, and certain members of the National Guard and Reserves. VA loans offer significant benefits, including no down payment requirement and competitive interest rates. Additionally, VA loans do not require private mortgage insurance (PMI), making them a very attractive option for eligible borrowers looking to finance a home without initial cash outlay.

In contrast, conventional loans typically require a down payment, and while some may allow for low down payments, they generally do not offer the same benefits as VA loans. FHA loans also require a down payment, though it can be as low as 3.5%, and they require mortgage insurance, further distinguishing them from VA loans. Jumbo loans are designed for higher-value properties and do not conform to the limits set by Fannie Mae and Freddie Mac, generally requiring a substantial down payment, making them unsuitable for someone looking for a no down payment option.