Water challah
Question
What is the significance of water challah?
Answer
Shalom!
Thank you for your question.
The term “water challa” as opposed to “egg challa” or “sweet challa” is, for the most part, nothing more than a taste preference. The recipe for water challa generally includes minimal-to-no sugar and no eggs. It therefore has a slightly rougher texture, has no sweetness and makes more crumbs. The other recipes make a sweeter and fluffier challa. It is all a matter of preference and taste.
That being said, there are indeed those, especially Sefardic Jews, who prefer a water challa for halachic reasons. This is because, according to Sefardic custom, if the challa is too sweet (note that both eggs and sugar add to sweetness) the blessing might be “mezonot” instead of “hamotzi. ” It is preferable, according all authorities, that the bread used for the Shabbat meals be a “hamotzi” product and not a “mezonot” product.
Source
OC 168:7