Which type of loan typically does not require mortgage insurance?

The answer is centered around how mortgage insurance functions in relation to different types of loans. Conventional loans that come with a down payment of 20% or more typically do not require private mortgage insurance (PMI). PMI is often mandated for conventional loans when the down payment is less than 20% to protect the lender in case of default. However, once a borrower reaches a 20% equity stake in the property, they can usually request the cancellation of the PMI, as the lender has a considerably reduced risk.

In contrast, FHA loans come with a mortgage insurance premium that cannot be canceled in the same way and generally applies regardless of the down payment amount. VA loans, which are utilized for veterans and certain military members, do not require mortgage insurance at all, but they come with a funding fee instead. Subprime loans, characterized by higher interest rates due to the borrower's credit risk, may also have insurance requirements depending on the terms of the loan agreement.

Thus, the characteristic of requiring no mortgage insurance is specifically tied to conventional loans with a sufficient down payment, making this the correct choice.