What type of loan do the Diaz's likely have if they did not make a down payment but paid a funding fee?

The Diaz family's situation indicates that they likely have a VA loan, primarily due to the absence of a down payment and the payment of a funding fee. VA loans are specifically designed for eligible veterans, active-duty service members, and certain members of the National Guard and Reserves. One of the key features of a VA loan is the ability for borrowers to purchase a home without making a down payment. This makes homeownership more accessible for veterans and service members.

Additionally, when obtaining a VA loan, borrowers are required to pay a funding fee, which helps to support the program and reduce costs for taxpayers. The funding fee can vary based on several factors, including the size of the down payment, whether the borrower has used a VA loan before, and whether they are part of active military service.

In contrast, FHA loans do require a down payment, typically around 3.5%, and do not have a funding fee; instead, they mandate mortgage insurance premiums. Conventional loans usually require both a down payment and do not involve a funding fee, while USDA loans are intended for rural property purchases and also typically require a down payment, although they provide certain financing options that might allow for minimal upfront costs.