The point of a down payment is if you default (don’t pay) your mortgage immediately, the bank keeps it, like they keep everything you pay before you default.

So if the government guarantees it, that means instead of putting (easy numbers) 10k down on a 100k house and having a mortgage for 90k, the government “co signs” and if you default in the first X years, they have to pay the 10k. But since you didn’t pay the 10k, your mortgage is still for 100k

When rent is more than a mortgage payment, this allows people to buy a house without spending years saving up a down payment