What type of loan often involves lower or no down payments and is aimed at prospective homeowners?

A government-backed loan is designed to assist prospective homeowners by allowing them to secure financing with lower or potentially no down payments. These loans, such as those provided by the FHA (Federal Housing Administration), VA (Veterans Affairs), and USDA (United States Department of Agriculture), are backed by the government, which reduces the lender's risk. This backing enables lenders to offer more favorable terms, including less stringent credit requirements and lower initial costs, making homeownership more accessible for individuals who may have otherwise struggled to afford a substantial down payment.

In contrast, conventional loans typically require a larger down payment and may be more stringent regarding creditworthiness. Contract for deed agreements are arrangements where the buyer makes payments directly to the seller, which can lead to complications and often does not involve traditional mortgage terms. The term contingency refers to conditions that must be met for a real estate transaction to proceed, and it is not a type of loan. Therefore, the characteristics of government-backed loans align closely with the question's focus on facilitating homeownership through lower financial barriers.