Doctor Loans – Physician Loan Options

Doctor Loans

Doctors, physicians and other healthcare professionals spend many years training for their profession and often accumulate a lot of student debt. This dynamic often makes it difficult to qualify for a conventional mortgage.

There are doctor loan mortgage programs which make it easier for doctors to qualify for a mortgage with no down payment and with competitive interest rates.

*Doctor loan tipYou can get approved for a Doctor loan up to 90 days before the start of your new job.

What is a Doctor or Physician Loan?

Doctor loans or physician loans are for healthcare professionals and have very flexible requirements and guidelines. The down payment for a physician loan is either very low or has no down payment at all.

This program is best for the physician who has a W2 job working for a hospital or some other healthcare facility. Doctors who are self employed and are operating a new practice may want to consider a bank statement loan.

Doctor Loan Mortgage Program Features

The special doctor loan mortgage program does not have a down payment requirement for loans up to $1 million. Higher loan amounts are available but with a small down payment.

PMI – Doctor loans also do not have PMI (private mortgage insurance) which is a huge monthly savings versus what you would have with a conventional loan.

Student Loans – If you have student loans, the monthly payments are not included in the DTI calculation of those payments are deferred for 12 months or longer. This is another huge advantage versus other loan programs and will help doctors and physicians to qualify for a larger loan amount.

Gift Funds – If you are looking for a large loan amount and a small down payment required, gift funds from family members can be used. Gift funds can also be used for closing costs if needed.

Seller Contributions – Sellers are permitted to contribute up to 6% of the loan amount towards closing costs or prepaid taxes and insurance. If you are shopping for a home during a buyer’s market, this can be a great advantage.

Loan Terms – Doctor loans are available in a 30 year fixed and some lenders also offer adjustable rate mortgage options.

Down Payment 0% 5% 10%
Loan Amount $100k – $1 Million $1 Million – $1.5 Million $1.5 Million – $2 Million

Other Doctor Loan Programs

Doctors may also apply for some of the more common mortgage programs if they are able to qualify. These are the most common if for some reason you are unable to qualify for, or prefer not to use the doctor loan.

Conventional Loans for Doctors – With a conventional loan, your minimum down payment will be 5%, but there will be PMI. You also will be capped on the DTI at about 43% and there are also loan limits. Read [Conventional loans]

FHA Loans for Doctors – FHA loans come with a 3.5% down payment and allow for credit scores as low as 500. The DTI ceiling is much higher at 56.9%. There is also the 203k rehab loan which will allow you to buy a home and also borrow the funds needed to update or rehabilitate the home. Read [FHA loans]

VA Loans for Doctors – If you are a doctor or physician and spent time in the military, a VA loan may be better for you. There is no down payment, no credit score requirement, and no maximum loan amount.

Who can Qualify for a Doctor or Physician Loan?

The following individuals may be eligible for a doctor or physician loan. This is just a sample and may not include all of the various professions. Therefore, we recommend that you contact us to speak with someone about your needs.

  • Doctors
  • Physicians
  • Nurses
  • Dentists
  • Podiatrists
  • Pharmacists
  • Optometrists
  • Physicians Assistants
  • Psychologists
  • Veterinarians

If you have a job in the healthcare field and do not see your profession listed above, then contact us to see if the doctor physician loan may apply to you. Read [mortgages for travel nurses]

Doctor Loan Interest Rates

The interest rates for doctor loans are extremely competitive and close to what you may expect from a conventional loan.

When you consider the fact that there is no PMI, your payment may actually be lower than other loan programs.

Just like any other mortgage, the interest rate offered is highly dependent upon your credit scores. The higher the credit score, the lower the interest rates.

Medical Student Can Qualify for a Mortgage

If you are a medical student or going through your residency, you may still qualify for a doctor loan. The lenders who offer these unique programs understand that you may still have the ability to make the mortgage payments in the future.

The lender will need for you to have a signed employment contract with your new employer as you are exiting your training and beginning to embark on your new career. This eliminates the need to have a two year work history with prior year’s tax returns documenting your income.

Refinancing with a Doctor Loan

Doctors and physicians can refinance their existing mortgage with a doctor loan even if their current loan is a traditional mortgage program. The loan to value ratio allowed will be higher and this can help during a time when there are declining home values.

Cash out refinances are available but you may be capped at 80% of the appraised value of the home.

Doctors Who Have a Recent Bankruptcy

Many medical professionals have struggled during difficult times and decided that a bankruptcy was the best financial alternative.  If you are a doctor, physician, or medical professional and experienced a recent bankruptcy, you can still qualify for a mortgage.

Chapter 7 Bankruptcy – If your bankruptcy was a chapter 7, you can qualify just one day after your discharge for a mortgage. However, it likely will require a much larger down payment.

Chapter 13 Bankruptcy – If your bankruptcy was a chapter 13, you can qualify for an FHA loan after you have made just 12 on time bankruptcy payments.

Doctor Loan FAQ

Do Doctor Mortgage Loans have PMI?
Doctor mortgage loans do not have PMI which makes them even more attractive than other mortgage programs.

Is there a special mortgage for doctors?
The special mortgage for doctors is the doctor loan program where you can purchase a home with no down payment.

Do doctors get lower mortgage rates?
Doctors do not get lower mortgage rates, but the doctor loan program allows for a smaller down payment.

Is a physician loan the same as a conventional loan?
A physician loan is different than a conventional loan and the lenders who offer them are not following Fannie Mae guidelines.

What credit score is needed for a doctor or physician loan?
The doctor loan or physician loan typically requires a minimum credit score of at least 660 due to the no down payment requirement.

Are doctor loans forgiven?
Doctor loans cannot be forgiven and always must be repaid in full.

Are doctor loans only for first time home buyers?
Doctor loans are not just for first time home buyers. They are for anyone in the medical field who can qualify for the program regardless of how many times they have owned a home.

What Others are Saying – “With high medical school debt and possibly no immediate income, newer doctors have a way to qualify for mortgages without having to put down thousands of dollars upfront.” – “After being in school for many years, young doctors often have little savings to use as down payment. Physician loan programs address that by making loans with as little as zero down.”

Doctor Loans