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A VA-guaranteed loan (provided through the U.S. Department of Veterans Affairs) is often used by veterans or active-duty service members looking to purchase a home without a down payment. These loans do not require private mortgage insurance (PMI) and can offer favorable terms, making them an attractive option for eligible buyers.

In this scenario, where the buyers purchased a home for $142,500 with a loan covering the entire price, a VA loan is a likely choice as it allows financing up to 100% of the home's purchase price. This type of loan is designed specifically for those who have served in the military, providing them with the opportunity to buy a home without the burden of a down payment.

Other loan types, such as conventional loans, FHA loans, and USDA loans, typically have different requirements, such as down payment obligations or limits based on geographical areas, which may not apply as straightforwardly in this situation. Thus, a VA-guaranteed loan aligns well with the circumstances described in the question.