Doctor mortgage loans, also known as physician mortgage loans, are being offered by an increasing number of banks and to an increasing number of high-income professionals other than just doctors. On this page, I'll explain what you need to know about physician mortgage loans, weigh the pros and cons, and help you decide if a doctor loan is right for you. We'll also discuss other financing options for purchasing a home including conventional loans, FHA and VA, and introduce you to the best lenders offering these programs to white coat investors.
Each WCI Recommended Mortgage Lender can be found by clicking on the map or the list found in the “See All Lenders” link below. They are the best in the business vetted by our staff and thousands of white coat investors over the years. Each of these only offers physician mortgage loans in certain states. These lenders are paid advertisers on the blog and will give you the top-notch service you've come to expect from a company recommended by WCI. If you find the service anything other than excellent, please let us know. Thank you for supporting those who support The White Coat Investor.
** White Coat Investor accepts advertising compensation from these lenders. Page order does not guarantee best possible rate and terms.
Equal Housing Lender. Member NCUA. Rates and Programs can change anytime without notice.
Susser Bank ∉
At Susser Bank, our reputation is everything. Our single-minded purpose is to create outstanding financial solutions which benefit our clients, team members and the communities we live in.
Terms:
100% up to $1m. 95% up to $1.5m. 90% up to $2m. No MI. Student loans do not count.
Susser Bank Mortgage has the tools and expertise to help you attain your homeownership dream. With in-house processing, underwriting, and closing, we will close your loan on time and as promised. There are many lenders to choose from, choose the one with the expertise and commitment to make that dream come true.
NMLS #402132 and all loans subject to underwriting approval and guidelines
Civista Bank
Terms:
Our physician loan program offers zero down payment up to $1,000,000, 5% down up to $1,500,000, and 10% down up to $2,000,000. The physician loan program does not charge any PMI (mortgage insurance).
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows, DVM, DPM
Strengths:
We cover appraisal fee
Allows physician to use new employment contract as qualifying income up to 6 months before start date (longer start dates can be considered)
Construction draw loans
Allow renovation financing on existing homes
2-4 units qualify for physician loan program
Vacation homes eligible for physician loan program
We are a nationwide portfolio and correspondent lender with in-house underwriting providing quicker closings. We offer Medical professional loans with 100% financing for up to 4 family primary residence purchases depending on the loan size. No PMI/MI We include more types of medical professionals than most lenders. Residents, Fellows, Medical Doctors, Dentists, Surgeons, Veterinarians, Pharmacists, Nurse Practitioners, Physicians Assistants, Nurse Anesthetist, Ophthalmologists, Optometrists, Chiropractors, Podiatrists. Not Listed? Please call to inquire.
Other products offered:
Fixed Rate Equity Loans
Home Improvement Loans with low fixed rates and no prepayment penalty! (Even if your home has zero equity, there is no appraisal needed)
Construction loans to permanent
Conventional
1st Time Home Buyer
2nd and investment properties
VA
Non-QM
Bank Statement
Reverse
Jumbo Loans
Mixed use properties up to 10 units (not available in all states)
It’s attention to the “details” that sets apart the finest Loan Officers. Please reach out 7 days a week. My team and I are experienced and knowledgeable and our goal is to set you up with a product that is best for your situation and then bring you quickly through the process and into your home with no stress. I will work closely with your counsel and realtor, keeping all informed every step of the way. Put my 3 decades of financial services experience to work for you.
Additional funds available after home purchase for renovations without requiring an appraisal or equity. Available to more medical fields than most, no pmi, competitive rates, flexible student loan payment options, can buy a home before starting employment.
Conditions and restrictions may apply. You may qualify by using your future income to purchase, prior to your new employment start date and using a lower payment for student loans than required by other lenders.
Alliant Credit Union
Terms:
30, 25, 20,15, 10 years
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows
Strengths:
100% Financing, Long Term Extended Rate Lock New Construction
DFCU Financial pays Cash Back* on deposits and loans – including our mortgages. The DFCU Financial Cash Back* program rewards eligible members for their loyalty with cash back in their account each year based on their average yearly loan and deposit balances – including mortgages.
Terms:
The DFCU Doctor Mortgage program was developed to meet the unique needs of physicians. This specialized program offers:
100% to $1,250,000, 95% to $1,500,000, and 90% to $1,750,000
No PMI
7/6 or 10/6 ARMs
No restrictions for time out of residency
No reserve requirement
700 MIN Credit Score
Expanded DTI requirements
Available to individuals credentialed as a MD, DO, DDS,DC,DMD,DVM
Cash Back* program eligibility
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows, DVM, DC
Strengths:
The program offers 100% financing up to a $1.25 million loan amount (95% financing up to a $1.5 million loan amount and 90% up to $1.75M) which is more generous that other programs available in the market and condos are also allowed under this product, up to 90%.
The Cash Back Disclosure:
While the DFCU Financial Board of Directors intends to pay Cash Back every year, and has done so since 2007, Cash Back is not guaranteed and will depend on our financial performance and other factors. Annual Cash Back payments are limited to an aggregate of $10,000 for each tax-reported owner. The IRS requires that Cash Back for an IRA be paid to the same IRA, and that it be open when Cash Back is deposited. Cash Back to Commercial / Business Banking members is subject to additional terms. Anyone who causes DFCU Financial a loss for any reason is not eligible for Cash Back.
Old National Bank
Old National is a regional bank with approximately $48 billion in assets, but we have the heart, culture and DNA of a smaller community bank. Since our founding in 1834, we have had an unwavering commitment to being a trusted financial and community partner. We offer physician loans at 100% financing to $750,000, 95% to $1,250,000, as well as higher loan sizes with tiered down payments. Options include purchase and refinance of primary residence, as well as construction financing options.
Terms:
Fixed rate and ARM options depending on loan amount and occupancy type. Primary residence – 100% financing up to $750,000; 95% up to $1,250,000; 90% up to $1,500,000; 80% up to $2,000,000. Minimum credit score – 700.
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows, DVM, DPM
Strengths:
My Program is open to all qualifying doctors regardless of years in practice, flexible underwriting on student loans, down payment and reserves may be gifted. I specialize in doctor lending and have decades of experience in mortgage loan originations. The biggest strength is the service you’ll receive. Product is important, but service is everything. I cater to our doctors demanding schedule, I am readily available to take a call or text at all hours on my cell at 313-492-1313.
We are one of the largest privately held banks in the country. We pride ourselves by going above and beyond. From your first interaction with us we simplify a process that’s often complex. We understand that your time is precious and our technology allows us to work together as efficiently as possible. We are also very competitive in finding you the lowest rate possible with the lowest possible costs and fees. We understand there may be real estate agents that don’t understand the physician loan program and we like to educate them on the benefits of using this program.
Terms:
Bell Bank offers home financing options geared specifically for physicians and dentists with term options of a 30 year fixed. In addition we also offer ARM options with a 5, 7 and 10 year ARM. Depending on your loan amount you would have 3 options.
Option #1
Loan amounts up to $1,000,000
Requires a 5% down payment
Requires 3 months of reserves
No mortgage insurance
Option #2
Loan amounts from $1,000,000 to $1,500,000
Requires a 10% down payment
Requires 6 months of reserves
No mortgage insurance
Option #3
Loan amounts from $1,500,000 to $2,000,000
Requires a 15% down payment
Requires 6 months of reserves
No mortgage insurance
Above options require:
Minimum credit score of 720
US Citizen
Must be an active medical doctor or resident or dentist
Fully executed employment contract with no contingencies is allowed for income verification. Application must start work within 90 days of loan closing.
Eligible Professions:
MD, DO, DDS, Resident, Fellows
Strengths:
Low fixed and variable APRS. Streamlined approval and application process. Here at Bell Bank we also service all of our loans and do not sell or transfer the loans to another servicer. Student loan payments can be omitted from the debt structure if we can show the payments will be deferred for at least 12 months.
At CrossCountry Mortgage, we separate ourselves from other mortgage lenders by offering exceptional customer service and a broad selection of home financing products. In addition to Physician Mortgages, our portfolio has an extensive range of products — from conventional and jumbo mortgages, to government-insured programs for veterans and rural home buyers, to programs that enable you to make full-cash offers — each homebuyer is different, so we make sure there is a solution for every lifestyle and personal situation.
Terms:
7, 10 and 15 year ARM. 15 and 30 Year Fixed
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows, DVM, DPM
Strengths:
Jeff Baker has advised clients in search of residential mortgages for over twenty years. His honest, consultative style stems from an unwavering commitment to putting his clients first. Whether you're a first-time homebuyer or seasoned veteran, Jeff's goal is get your loan to the closing table with minimal stress and under the best terms available.
Jeff specializes in CrossCountry’s Physician Loan Program which offers low and no down payment options for Medical Doctors, Dentists and Veterinarians. Our program includes flexible underwriting guidelines such as the ability to use future employment, 1099 contract income, gift funds, and relaxed student loan qualifications.
We value your contributions as healthcare professionals, so we also offer our Preferred Mortgage Savings to members of the White Coat Investor community. Through this affinity program, we will waive our lender and appraisal fees, providing a savings of up to $2198.
Ready to get started? Click below to learn more and complete our online application.
At PNC, our knowledge, experience, and innovation can help you achieve your financial goals today. PNC Bank is one of the nation’s top retail lenders and servicers of residential mortgage loans, and for more than 160 years, we have been committed to providing our clients with great service and powerful financial expertise to help them meet their financial goals. Combine approximately 2,200 retail banking branches and 8,900 ATMs throughout the U.S., with competitive products and online and mobile solutions, and you’ll find we’re ready to provide you with convenient and sure access to a great customer experience. To learn more about your lending options, or to start an application, visit us online or contact our customer care center today!
Terms:
Loan-to-values up to 95%. Loans up to $1.5M. Fixed and Adjustable Mortgage Products Available. PNC's Physician Mortgage is available from Residency to Retirement. Physicians can use the Product Multiple Times.
Eligible Professions:
MD, DO, Resident, Fellows
Strengths:
Strengths include a minimum down payment, no PMI, all funds can be gifted, student loans debts are sometimes excluded. Physician mortgage loan can be used for single family, condo, town homes, co-ops in some markets, and construction or renovation to permanent loan.
Get the right tool to build or renovate you dream home. With its unique features and benefits, the PNC construction or renovation to permanent loan can help bring your vision for your home to life.
A variety of options to fit your specific needs
End-to-end support from the PNC Construction Team
One-time closing, eliminating the need for separate Interim Construction Financing
One set of closing costs to help you save money
Capped interest rate protection with a one-time float down at the completion
12-month construction/renovation phase to accommodate projects of any size
A simple and straightforward draw process for you and your builder.
Liberty Federal Credit Union is a member-owned financial institution focused on returning value through innovative products and services. Liberty has been recognized on a state level by Forbes as one of Indiana’s best financial institutions. In recent years, the credit union has also received acclaim on a national level, including being named the nation’s Best Credit Union for Checking by Investopedia in 2021 and appearing on Newsweek’s list of America’s Best Banks in 2022.
Liberty Federal Credit Union excels in providing value through better loan options for borrowers. For instance, the credit union offers an uncommonly wide variety of mortgage options to ensure the best fit for its members. According to the American Credit Union Mortgage Association, Liberty FCU was the Midwest’s top credit union in 2021 total first mortgage originations.
Terms:
Program features:
No Private Mortgage Insurance (PMI)
100% financing up to $970,800 loan amounts
95% financing for $970,801 to $1,500,000 loan amounts
90% financing for $1,500,001 to $2,000,000 loan amounts
Purchases and rate/term refinances are eligible
Low credit score requirement of 680, plus free in-house credit repair
We are committed to offering your lowest rate. If you find a lower rate, we’ll match it.1
Receive a gift card worth up to $500 on closing! 2 Plus, pair your mortgage with your Liberty FCU checking account and debit card to receive a 1/8% APR interest rate discount. 3
Whether you just began your residency or you are an established physician, Liberty FCU is dedicated to helping you secure the home of your dreams.
This program is available to residents, fellows, new, and established physicians alike. 4 We will gladly work with you and your busy schedule. Pre-qualification can be done easily online or through email.
Loans are subject to credit review and approval. Closing costs may apply. Liberty FCU mortgage lending product availability may vary based on property location. A sample principal and interest payment on a (7)-year $500,000 adjustable-rate loan amount with a 3.500% interest rate (3.575% APR) is $6,719.93. Taxes and insurance are not included; therefore, the actual payment obligation will be greater. Actual interest rate may vary based on credit history. Additional rates and programs available. Visit us online for current rate information. Contact a Liberty FCU mortgage loan officer for more details.
1 Rate Match Guarantee available for new purchases and refinanced first mortgage loans of primary residences with conventional conforming financing. Certain product exclusions may apply. Loan Estimate from competing lender must be dated and received within three calendar days prior to locking your interest rate at Liberty FCU. The terms of the competing loan must be identical to Liberty FCU’s loan. If the loan does not close within the commitment period, the rate match may be voided. This offer is subject to credit approval and may change or terminate without notice. Offer is not applicable to government loans, including FHA, USDA, and VA financing. Not valid in combination with 1/8% rate discount. Product offerings may vary by state or region.
2 Gift card offer is available on financing of purchase or construction loans for primary residences only. Purchase or construction loan amounts up to $149,999 will receive a $250 gift card. Purchase or construction loan amounts of $150,000 or greater will receive a $500 gift card. Not valid in combination with any other offer.
3 Discount available on conventional conforming financing of purchases for primary residences only. Offer available for new primary mortgage loans and mortgage loans already established at Liberty FCU when refinanced with at least $10,000 new money. Closing costs may apply. Liberty FCU verifies the past checking history of applicants with ChexSystems, a national consumer reporting network. Information obtained from the report could result in checking account denial. Certain product exclusions may apply.
4 Available to residents, fellowship, newly established, or established physicians with MD, DO, DDS, DMD, OD, or DP credentials. Rates listed are specific to the Physician Loan mortgage program. Standard mortgage rates may vary.
First Merchants Bank ^^
First Merchants Bank is a community bank with our roots firmly in the Midwest. We got our start in Muncie, Indiana in 1893 and we’re proud to serve customers across Indiana, Ohio, Illinois, and Michigan. At First Merchants, we believe in providing dependable, big-bank services while maintaining the welcoming, close-knit feel of a community bank. We are attentive to our customer’s needs, with a focus on building relationships and elevating our communities. It’s a combination that’s earned us a Best Bank rating from Forbes and Newsweek.
Terms:
We offer fixed rate and adjustable rate mortgage (ARM) programs. 100% financing up to $1 million, 95% financing up to $1.25 million, and 89.9% financing up to $2 million. No private mortgage insurance (PMI). Purchase and rate and term refinance available. Primary residence and condos allowed; non-warrantable condos considered. Loan amounts available up to $500,000 for Medical Residents with proof of fully executed employment contract. Can close up to 90 days prior to new employment start date with employment contract. All loans subject to credit approval. Contact for additional details and eligibility requirements.
The Physician Mortgage Program at First Merchants Bank offers greater flexibility on your debt-toincome (DTI), no private mortgage insurance (PMI), a lower down payment and higher loan limits than most traditional mortgage programs. Student loan debt can be eliminated from debt-to-income calculations when in deferment or forbearance for at least 12 months after loan closing. Gift funds are allowed towards down payment, closing costs and reserves. We do not require a banking relationship or auto pay to qualify for program benefits or rate discounts.
Read below to learn more about us. But if you are on a short time-line and are looking for information quickly, go to www.physicianloans.com, click on Get Started and take one minute to complete the short form. Tal will make sure that you get what you need right away.
PhysicianLoans originated as a family business in 1993 and after being a pioneer in the physician loan space, grew to become one of the most trusted brands for doctors. Our loan officers specialize in working with doctors and are true experts on financing for Doctors. Our team can assist you in 47 states
PhysicianLoans is an approved member benefit for the AMA, AOA and SOMA. We are a trusted name in home financing for doctors.
We are also more than just a place for rate shopping. If expertise, advice and customer service are important to you, always be sure to speak with a PhysicianLoans loan officer.
Visit www.physicianloans.com, click on GET STARTED, and take one minute to complete the short form. Or call us at 877-593-9313. We will be in touch quickly and get you what you need to successfully move forward.
Not a hard sales pitch. Just the advice and information you need.
Terms:
No Money Down, No PMI, 50% DTI, Special Underwriting, ARMs and Fixed
Eligible Professions:
MD, DO, DDS, DMD, DVM
Strengths:
Pioneers in this space, Best Customer Service, Experienced
Our home loan for Medical Professionals or Physicians was designed to help those in the medical profession achieve their dreams of homeownership. At The Federal Savings Bank, we are committed to finding the right mortgage for our customers, including those who are committed to save lives. We understand your unique needs. You might have accumulated debt to become a healthcare professional, but we are here to help you! Our offering will help you buy a home early in your career, and sometimes even before you start your new job!
We are a nationwide portfolio and correspondent lender with in-house underwriting providing quicker closings.
Other products offered:
Fannie Mae & Freddie Max – Conventional, High Balance and CRA
VA – No Loan Limit, No DTI Limit
Jumbo – 15% down option
FHA
USDA
ITIN – as low as 10.01% down
Construction loans – Conventional & FHA (min 5% down), VA (min 0% down), Jumbo (min 20% down)
Second Home and Investment properties
DPA for qualified borrowers
Non-QM – DSCR, Bank Statement, 1099, Asset Depletion, etc
Multi-family and Mixed-use properties up to 8 units
Reverse
It’s attention to the “details” that sets apart the finest Loan Officers. Please reach out 24×7. My team and I are here to understand your mortgage and financial needs and find the best financing solution for you.
Subject to credit approval. Terms and conditions may apply. VA is subject to VA eligibility requirement. Property insurance is required for all loans secured by property.
The Federal Savings Bank | Co. NMLS# 411500 | All Rights Reserved | thefederalsavingsbank.com
Member FDIC | Equal Housing Lender
Amerant Mortgage
Amerant has unique product offerings with competitive rates and niche guidelines to ensure you get personalized advice. We offer construction to permanent doctor loans, doctor loans on primary and second homes (stricter DTI and reserve requirements and higher minimum downpayment for second homes), and DSCR (Investor cash flow loans with no income document required).
Terms:
Arms and Fixed Rates available. Unique Guidelines tailored to professionals; Doctor loans available for second homes.
Eligible Professions:
Any Profession
Strengths:
Available on primary homes, Construction to Permanent loans and Second Homes with competitive rates
Fifth Third offers competitive programs and will look at all available options for the client that will be more beneficial to their scenario, as each client's scenario is different. With over 20 plus years of experience working with Physician's and these loans officers offer top notch professional “white glove” service.
Terms:
Zero Down to $1m, 5% Down to $1.5m and 10% Down up to $2.0m
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows, DVM, OD, DPM
Strengths:
No PMI, Low Down Payment Options, Experience with Physician Lending
Residents with 6 months or less left in their residency or Fellowship programs who have accepted permanent positions or doctors that have completed residency within the past 10 yrs are eligible for the physician mortgage loan.
Citizens Financial Group, Inc. is one of the nation’s oldest and largest financial institutions, with $226.7 billion in assets as of December 31, 2022. Headquartered in Providence, Rhode Island, Citizens offers a broad range of retail and commercial banking products and services to individuals, small businesses, middle-market companies, large corporations and institutions. Citizens helps its customers reach their potential by listening to them and by understanding their needs in order to offer tailored advice, ideas and solutions. In Consumer Banking, Citizens provides an integrated experience that includes mobile and online banking, a full-service customer contact center and the convenience of approximately 3,400 ATMs and approximately 1,100 branches in 14 states and the District of Columbia. Consumer Banking products and services include a full range of banking, lending, savings, wealth management and small business offerings. In Commercial Banking, Citizens offers a broad complement of financial products and solutions, including lending and leasing, deposit and treasury management services, foreign exchange, interest rate and commodity risk management solutions, as well as loan syndication, corporate finance, merger and acquisition, and debt and equity capital markets capabilities.
Terms:
Borrowers may be self-employed physicians (2 year history needed) or medical researcher
Up to 95% financing up to $850,000/89% to $1M/85% to $1.5M on purchase & refinance
Up to 85% on Construction to Permanent loans with 12, 15 or 18 month build & one-time close
NO Private Mortgage Insurance Required
Non US Citizens are eligible
Can use employment contract income & close on your home 90 days prior to start date
SPECIAL banking relationship discount through a Citizens Bank Account
Seller Contributions Allowed
RECAST option available
30yr, 20yr, 15yr and 10yr fixed rate loans, 5,7 or 10 yearARMs.
Minimum credit score of 700
Student Loan Debt omitted in qualifying debt ratios if deferred at least 12 months following closing.
Ability to use IBR payment if not deferred for 12 months
Borrowers must have completed residency or fellowship within the last ten years, be a newly licensed
medical resident or about to begin new employment or residency within 90 days of closing.
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows
Strengths:
Superior service, loan exceptions available and flexibility in underwriting.
Working exclusively with medical professionals.
Offer both fixed and adjustable rates with low down payment and no PMI
Also offer construction to permanent loan
Flexibility with student loan payments
First Federal Lakewood has been in business since 1935 and was established as a community and neighbors-first mutual bank. Over the year’s we’ve grown into the largest depositor- owned community bank headquartered in Ohio! Our physician loan program is simply one of the best available. We are deeply rooted in the communities we serve. That means that we make decisions that benefit you, the overall local economy, and our employees – NOT shareholders. We give 5% of our net profits back to the community every year.
Terms:
0% down up to $1 million, 5% down up to $1.25 million, 10% down up to $1.5 million, and 15% down up to $2 million.
NO PMI (mortgage insurance) required.
700 credit score minimum.
Primary residence, Purchase only for single family, town home, and warrantable condominium.
NO Prepayment Penalties with RECAST option available.
Closing may occur prior to employment start date with an acceptable fully executed signed contract and proper cash reserves.
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows, DVM, OD, DPM
Strengths:
We close and service our physician loans in house and don’t sell your loan to another mortgage servicer after closing like most banks or lenders do.
You would work with me from start to finish around your schedule, I don’t pass you off to a loan processor after initial application.
We offer interest rate protection so if rates drop between initial application and closing, we have the option to float down your rate to match the current market rate for a one time $350 fee.
Many physician lenders will only close your loan if you start your new position within 30-60 days. We will allow you to close up to 6+ months before your start date using your new employment contract, as long as you have sufficient assets to cover the payment prior to starting new job.
Long term locks available for 9 to 12 months which are typically more affordable for a physician who is purchasing a new build that will not close until the home is complete.
Physician loan refinance available for currently serviced clients only.
Local community banking for Physicians; as your mortgage lender with Frandsen Bank & Trust, we pride ourselves on superior service from application until your final payment and beyond. Our expertise is mortgage lending anywhere in Minnesota and Wisconsin; where our offices are located, areas we know and can best service our borrowers. As a community banker, we genuinely understand every situation is unique, deserving special attention. Frandsen Bank & Trust gives me the ability to customize our offerings to buy, build, remodel or refinance your home to fit your unique situation and goals. We know local lending with offices in over 35 communities across Minnesota and Wisconsin. We are committed to gathering all information while giving every available financing option to my customers to help achieve their financial goals and dream of home ownership.
Frandsen Bank offers financing options for primary homes, second homes, and investment properties. We are here to answer all your questions and create specific scenarios to fit your needs. With our ability to hold/service your loan, we are your primary contact from application through your final loan payment. Get approved today, so you are ready to buy next week, next month, or next year!
Terms:
0%-10% down options up to $2 million. 720 minimum credit score, No employment start date restrictions. Student loans excluded from debt ratios. ARM loans to 15/3. No mortgage insurance. No prepayment penalties. All terms flexible and customizable with exception approval.
Personalized and customized approval process that works with your specific scenario and goals as a relationship lender beyond just a transaction. Our approval is quick and smooth with flexible underwriting guidelines for all Physician/Doctor Loan parameters; decisions come out of the my office. Frandsen Bank holds/services almost all our loan options; I am your contact from time of application and will be your primary contact for the life of your loan. Local community bank lending only in MN/WI where we can best service our borrowers in the areas we know. Fully executed contract financing and 1099/self-employment financing.
TD's medical professional mortgages allow for participants to put a lower amount, sometimes nothing, toward a down payment. Under our current financing terms, physicians can borrow up to 100% of the home's value up to $1,000,000, 95% financing up to $1,500,000, and 89.99% financing up to $2,000,000. Additionally, our terms allow for medical professionals to purchase a single-family residence, a condominium, planned unit development, a COOP, providing flexibility as they assess what type of home will best suit their needs.
In many cases residents, doctors, and dentists can use a contract for new employment to qualify for a medical mortgage, allowing them to purchase a home before beginning their job or residency within the field.
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows, DPM
Strengths:
When we launched our Medical Professional Mortgage in 2019, we built out a robust program that included highly experienced loan officers as well as a dedicated operations team expressly trained to process, underwrite and close these loans. Since then, we've made additional investments in technology to serve our medical professional customers, including a new loan operating system – managing every aspect of the life of a loan from prospecting through to closing. We also have new digital application software which reduces origination and processing time and is fully integrated with the new loan operating system.
We pride ourselves on our flexible debt-to-income ratios and commonsense underwriting. Physicians and dentists don't fit the typical profile for traditional mortgages, but that doesn't mean they shouldn't have the opportunity to realize the dream of homeownership. Qualifying requirements are typically fewer than that of a traditional mortgage program and are aimed at healthcare professionals who are looking to reduce debts of other forms, while investing in homeownership.
Additionally, TD does not require a two-year self-employment history on new self-employed dentists and physicians. This unique benefit we offer helps borrowers who recently purchased a practice and don't have a two-year employment history.
Lastly, TD retains the servicing on its medical professional mortgages, so we support our customers throughout their entire financial journey.
0% down up to $750K, 5% down up to $1.25M, 10% down up to $2M. Down payment and closing costs may be gifted.
Eligible Professions:
MD, DO, DDS, DMD, DVM, DPM
Strengths:
0% down and a fast approval process due to our “true team spirit” rather than a large bureaucracy. Only 2 months reserves required and portfolio loans for strong borrowers and those outside traditional guidelines. We can also assist with non-warrantable condominiums, recently self-employed, and foreign nationals.
All products herein are subject to credit and property approval. Program terms & Conditions including interest rates, annual percentage rates (APRs) and points or fees are subject to change without notice. Your APR will vary based on your final loan amount and applicable finance charges. Not all products are available in all states or for all amounts: consult your mortgage loan originator for additional details. There are no restrictions to the length of time since the medical professional has completed their residency. All loans subject to credit and property approval.*Restrictions apply, consult your mortgage loan originator for additional details.
Clearly a strength is our product is more flexible than most of our peers. We have been able to help several physicians who were turned down elsewhere for the product recently. Allowing physicians to be greater than 10 yrs out of residency and still qualify has been helpful to many. The opportunity to provide 100% financing up to $1.5 million, and 95% financing up to $2 million, and 90% financing up to $2.5 million has been strong compared to competitors. Condos are allowable under the product.
0% down up to $750K, 5% down up to $1M, 20% down for greater than $1M
30 Year Fixed, and 7/1 ARM available –No PMI – Exclude all student loan debt from ratio! 10% down with no PMI on single family investment properties available too.
Eligible Professions:
MD, DO, DDS, DMD, PA, NP, CRNA
Strengths:
Exclude all student loan debt from ratio which increases your buying power. Can close prior to employment. Community banking allows for more flexibility to fit your specific scenario with common sense underwriting. Fast closings. Your loan will not be sold to a 3rd party. 4% checking account (up to $15K balance) available. 90 day lock and shop available. Lock in rate now while you search for your dream home.
The Physician Loan Program is designed for medical professionals who are purchasing their Primary Residence. Practicing doctors must be out of residency/internship/fellowship less than 10 years. All Borrowers and Co-Borrowers must occupy the home and only one is required to be a medical professional. This program requires the client to have a Berkshire Bank checking account and set up auto pay of their mortgage payment. Eligible properties include single family, condominiums, and PUDs.
Terms:
Various terms and plans available. No PMI. Closing available 90 days before employment starts. Seller contribution allowed. Escrow waivers not allowed. Minimum FICO score of 700 to qualify. Maximum debt to income ratio 45%. 100% loan to value (LTV) up to $1,000,000. 95% LTV to $1,250,000. 90% LTV to $2,000,000. Reserve Requirements: Reserves are required and the range from 2-6 months of your monthly mortgage payment
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows, DVM, DPM
Strengths:
Product Eligibility: 30 Year Fixed, 15 Year Fixed, as well as 5/6 and 7/6 ARM.
1099 Independent Contractor for less than 12 months allowed
Future Employment: Projected Income is acceptable for qualifying purposes when a borrower is scheduled to start a new job within 90 days of loan closing.
Mortgage products are provided by Berkshire Bank: Member FDIC. Equal Housing Lender. Berkshire Bank is a Massachusetts chartered bank. All applications must be submitted in writing. All lending products are subject to credit and property approval. Products are not available in all states. Certain conditions and restrictions apply. Refinancing to reduce total monthly payments may lengthen repayment term or increase total interest expense compared with your current situation. Berkshire Bank NMLS 506896.
Bank First
Bank First recognizes your professional success and the financial success that accompanies it. If you are a physician, our Professional Mortgage Program offers unique benefits compared to a traditional mortgage. Contact Bill today to find the perfect mortgage solution for you!
Terms:
Terms:
30, 20, 15, 10 year fixed
10, 7, 5 year ARMs
100% financing for loans up to $750,000
95% financing for loans $750,000 to $1,500,000
90% financing for loans over $1,500,000
Can do out of state financing for a Bank First customer with max 80% LTV
Owner occupied 1st and 2nd homes
Can lock out to 120 days
Expanded loan-to-value ratios
No income history requirement
Can use proof of future income (employment contract) within 60 days of closing.
No private mortgage insurance requirement
Retirement individuals from approved professions are eligible.
Available for purchase or refinance on owner-occupied residences
Available for 1st position liens only
Standard fees apply
Subject to credit approval
Offer subject to change at any time
Eligible Professions:
MD, DO, DDS, DMD, DVM, Pharmacist, Attorney, Professional Athletes
First National of Nebraska and its affiliates have nearly $30 billion in assets and 5,000 employee associates. We are the largest privately owned bank in the country and have over 165 years of history helping the communities that we serve. Primary banking offices are located in Nebraska, Colorado, Illinois, Iowa, Kansas, South Dakota, Texas and Wyoming. Learn more at First National Bank of Omaha. We also have additional products to assist Physician Assistants, Nurse Practitioners, CRNAs, and Pharmacists.
Terms:
FNBO offers home financing solutions geared specifically towards physicians with term options of 15 and 30 year fixed, in addition to ARM products up to 15 years. Depending on your loan amount, you would have 3 options:
Option #1
Loan amounts up to $850,000
Requires a 0% down payment
Requires 4 months of reserves
No mortgage insurance
Option #2
Loan amounts from $850,001 to $1,250,000
Requires a 5% down payment
Requires 4 months of reserves
No mortgage insurance
Option #3
Loan amounts from $1,250,001-$1,500,000
Requires a 10% down payment
Requires 4 months of reserves
No mortgage insurance
Above options require:
Minimum credit score of 720
US citizen or permanent resident alien
Must be an active medical doctor or resident or dentist
Fully executed employment contract with no contingencies are permitted for income verification. Applicant must start work within 90 days of loan closing.
Eligible Professions:
MD, DDS, DMD, Resident
Strengths:
We are the largest privately owned bank in the country. We understand the importance of the home ownership process and how moving quickly can help with competing offers. Taking care of our customer is our #1 priority and we have the mortgage technology that allows customers to access their information quickly and accurately.
A global mortgage lender representing clients throughout the Golden State of California – from Los Angeles to Sacramento, Humboldt to Palm Springs, and Napa to San Diego. Trusted resource to doctors and other professionals doing high-end mortgages for 20+ years. The team at Premier Realty Lending is ready to assist you in every step of the process – whether it be a refinance or a purchase, as a California Refinance and Purchase Specialist. Languages include Urdu and Punjabi. Contact us if you are looking for a knowledgeable and motivated mortgage lender for your next transaction.
At Premier Realty Lending our motto is “On Time and as Promised”, and our Doctor Loan Program has been curated with that in mind. We’ll organize the process from loan application to move-in date to help you get to the finish line. At Premier Realty Lending, we are a high-tech company, and we have a streamlined process that can be started right from your smartphone. Apply online here or contact Nikki.
100% financing options available with fixed or adjustable terms for clients with 720 credit score or better with minimal down payment for medical professionals with credit scores down to 680. Can now help 1099 independent contractors with no previous experience as self-employed, 100% loan to value to $1M, 95% loan to value to $1.25M and 90% loan to value to $2M loan amount. 50% max DTI. Can close anytime prior to a new job start date. Flexible with student loan debt.
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows, DVM, DPM
Strengths:
The biggest challenge in the mortgage industry right now is speed to close, with housing inventory at an all-time low, we’ve focused on helping our clients close their loans in as little as 17 days (depending on the program and down payment amount).
Explore no Private Mortgage Insurance (PMI) options+ with a Mortgage Loan Officer+. Check your rates today!
Terms:
Up to 90% financing options available. Ask about our competitive terms on rate/term and cash-out refinancing. NO PMI. Fixed rate and variable rate mortgages available. NO prepayment penalty. Only available when purchasing or refinancing with no cash out on a primary residence and loan amount does not exceed $2,500,000. Retired doctors are not eligible. Additional conditions and restrictions may apply.
Eligible Professions:
MD, DO, Resident, Fellows, DPM
Strengths:
Low fixed and variable APRs. Streamlined application and approval process. See www.laurelroad.com/wci.
Notice: This is not a commitment to lend or extend credit. Conditions and restrictions may apply. All credit products are subject to credit approval. Mortgage products are also subject to collateral approval. Hazard insurance and, if applicable, flood insurance are required on collateral property. Actual rates, fees, and terms are based on those offered as of the date of application and are subject to change without notice.
95% financing is only available to interns, residents, fellows, doctors, dentists, clinical professors, researchers, or managing physicians with a current license and a degree of Doctor of Medicine (MD), Doctor of Osteopathic Medicine (DO), Doctor of Podiatric Medicine (DPM), Doctor of Dental Surgery (DDS), or Doctor of Dental Medicine (DMD). Only available when purchasing or refinancing with no cash out on a primary residence and loan amount does not exceed $1,000,000. Retired doctors are not eligible. Additional conditions and restrictions may apply.
Only available to interns, residents, fellows, doctors, clinical professors, researchers, or managing physicians with a current license and a degree of Doctor of Medicine (MD), Doctor of Osteopathic Medicine (DO), or Doctor of Podiatric Medicine (DPM). Retired doctors are not eligible. Additional conditions and restrictions apply.[/scroll-box]
0% Down to $1,250,000.00, 5% down to $1,500,000.00, 10% down to $1,750,000.00, and 15% down to $2,000,000.00. 15-30 year fixed and 5/1-15/1 ARMS. Available for purchase, refinance, and construction.
Eligible Professions:
MD, DO, DDS, DMD, CRNA, DPM
Strengths:
As a Credit Union, we offer lower rates and costs as well as a 3% checking account (up to $15K balance).
Green State Mortgage is a boutique lender with access to the most competitive rates and programs. Allow us to tailor a lending program that meets your needs!
Terms:
0% down up to $1,000,000, 5% down to $1,250,000, 10% down to $2,000,000. 1-2 Unit Properties, Condos, Townhouses, PUDs, Modular Homes. No PMI. No Prepayment Penalty. Non-Warrantable Condos to 90%. Fixed and adjustable rates (7, 10, and 15-Year ARM) available. No time restrictions on when a client starts their new employment vs. the closing date if they have enough reserves for W2 positions. 60 days prior to start date for 1099 positions.
No time restrictions on when a client starts their new employment vs. the closing date if they have enough reserves. Most other lenders limit the purchase date to 60-90 days before starting a new position. We also allow business assets and gift funds for the down payment, closing costs and reserves. Debt-to-income ratios up to 50%. No 2-year history is required for physicians hired as a contractor or 1099 employee. Available nationwide (except CA), 2-unit properties eligible, flexibility for newly self employed.
Green State Mortgage – A division of Green State Credit Union
First Citizens Bank
Thank you for your interest in First Citizens Bank! We offer physician loans at 100% financing to $1,000,000, 95% to $1,250,000, as well as higher loan sizes with tiered down payments. Options include purchase and refinance of primary and secondary residence as well as construction to permanent financing. There is no PMI on our Medical Mortgage products and no limit on years in practice for established physicians. The minimum credit score for this program is 680. Treatment of student loan payments in calculating debt to income ratios can often be of concern to physicians; but we are very flexible on how we underwrite deferment and income based repayment. Loans may close up to 60 days prior to employment start date. This program is open to US citizens, permanent, and non-permanent residents.
Terms:
Fixed rate and ARM options depending on loan amount and occupancy type. Primary residence – 100% financing up to $1,000,000; 95% up to $1,250,000; 90% up to $1,500,000; 80% up to $2,000,000; 75% to $3,000,000. Second home – 89.99% financing up to $1,250,000; 85% up to $1,500,000; 80% up to $2,000,000. Construction and Renovation – 89.99% financing up to $1,500,000; 85% up to $1,750,000. Minimum credit score – 680. Eligible borrowers include US Citizens, Permanent Resident Aliens, and Non-Permanent Resident Aliens
Program is open to all qualifying doctors regardless of years in practice, flexible underwriting on student loans, down payment and reserves may be gifted, excellent client service, and retained loan servicing. I specialize in physician lending and have over 20 years of experience in mortgage loan originations. I also have prior experience in loan processing and underwriting. Our origination and fulfillment teams have a great partnership environment and I’m confident in our ability to deliver a smooth and stress free experience. Apply online here.
Founded in 1937, MSUFCU was established 85 years ago to provide a safe place where members could borrow and save money. Over the years, we've built a strong foundation of relationships with our members – ultimately helping them achieve their dreams. Our employees live our mission every day to spark those moments for members to find financial freedom and security, as they purchase their first cars and homes, start their own businesses, and save for their children's futures. There are several options to qualify for membership: MSUFCU provides financial services to the MSU community, select employee and community groups, and anyone who is an immediate family or household member of someone who has an MSUFCU account. We offer services to anyone who lives, works, worships, goes to school, or owns a business in Oakland, Genesee, Lapeer, Livingston, and Macomb Counties. Additionally, individuals seeking membership with the Credit Union may opt to donate a minimum of $10 to the Desk Drawer Fund to become a donor member of the foundation.
Terms:
No PMI, as low as 3% down, Fixed-Rate up to 30 years. Loan Amounts $100,000 – $3,000,000
MSUFCU's Professional Mortgage Loan provides you the financial flexibility you need: As little as 3% down. No requirement for private mortgage insurance (PMI). Employment verification letter or employment offer letter may be used for qualification. Gift funds may be used for qualification. Student loans deferred for 12 months may be excluded from qualifying ratio in some instances.
Equal Housing Lender. Member FDIC. Rates and Programs can change anytime without notice.
Fulton Mortgage
With over 22 years of mortgage banking experience and having helped well over 1000 family’s originating nearly one billion dollars in residential loans. This experience will provide important assistance for someone who needs help during the home buying process.
Terms:
Fulton Mortgage Company offers zero down up to $1,500,000, 5% down for loans from $1,500,001 to $2,000,000, 10% down Loans from $2,000,001 to $3,000,000.
No mortgage insurance with the loan and no restrictions for prepayments. Can close 90 days before the start of a new salary guaranteed job using that income to qualify. Gift funds from family member allowed for closing cost / prepaid expenses or down payment.
Must be US Citizen or have Valid Green Card. Student loans not counted in Debt-to-income ratio for Residents as long as 6 months or more remaining in residency. IBR payments used for doctors after residency training. Allow Doctors to be out of training up to 15 years. If relocating and taking new job time out of residency not applied. Must purchase with in one year of relocation if out of residency more than 15 years.
Terms: 15 year and 30 year fixed. 5/6 ARM , &/6 ARM, 10/6 ARM, 15/6 ARM
Low down payment for high loan amounts, No Reserves for 60 Day close, future employment contract 90 days from start date, family co-signer for Residents / Fellows.
BMO Bank has developed a class leading Physician & Dentist Mortgage Loan Program. The below Loan Officers have decades of experience not only in the mortgage industry but also working specifically with Physicians and Dentists. We are dedicated to ensuring a qualify experience to all buyers, from start to finish.
Loan Officer Info:
Please contact the listed Loan Officer based on the state in which you are purchasing.
Terms:
100% financing to $1MM, 95% to $1.5MM, 90% to $2MM, less than 10 years practicing(not including residency or fellowship) for down payments less than 10%. Primary Residence SFR, Condo, 2 unit properties eligible. Can close up to 90 days prior to employment start date with signed contract or signed offer letter. 30 year fixed rate options along with shorter term fixed and ARM’s. No PMI/MI. Rate/Term Refi or Purchase only. Gift funds allowed for down payment, closing costs, and reserves. We are now able to use 1099 contract income for doctors who have a guaranteed minimum salary in their contract without a 2 year history of income established as a 1099 employee. Must be actively seeing patients.
Eligible Professions:
MD, DO, DDS, DMD, Resident, Fellows
Strengths:
BMO Bank developed and began offering a physician loan program in 2015. The program has been expanding and growing for the past 8 years. All of the Loan Officers listed specialize in the physician loan product. These 4 loan officers have a wealth of knowledge and experience to handle any scenario imaginable. We can quickly determine what options are available within BMO’s loan options to structure a loan to fit your needs. We have dedicated processors and underwriters to ensure a smooth lending process and quick closing. We look forward to earning your business!
Arvest Bank proudly serves our community’s medical professionals. We’re here to make life easier at every stage of your career, whether you’re just out of school or have practiced for years. We offer competitive local mortgage options, plus a variety of tailored services to manage your professional and personal finances.
Terms:
Up to 103% Mortgage Financing* with no money down for physicians and CRNA’s up to $1,250,000,
95% financing up to $1,750,000.
No Private Mortgage Insurance, resulting in lower monthly payments
Residents/Fellows are eligible if schooling has been completed and under contract for employment/residency
Any financing over 100% must be used for taxes, insurance and other closing costs. Financing is available for eligible applicants and professions. Credit, income and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms and conditions are subject to change without notice.
American National Bank and Trust
We are a fully customizable mortgage lender that looks for ways to make loans work. We offer out of the box lending options in addition the normal loans all other banks offer. Before pulling the trigger on something, let us look at you situation and find a solution.
Terms:
Up to 100% financing for all physician loans on single family resident homes, non warrantable condos, 30 years fixed and ARM loan products. Loan programs are often customized for your current situation. We can offer lending options with less than 2 years of being self-employed or newly 1099 with a contract.
Eligible Professions:
Any Profession
Strengths:
Our physician loans are not just black and white like a whole lot of other lenders. We discuss with you what your specific needs are and how we can help facilitate a loan for you. We don’t have a set of “guidelines” or a “grid” that specifically shows what a credit score needs to be or what the down-payment would be. We cater a loan for what you want and we work together to make that happen.
A physician or “doctor” mortgage is a special loan program a lender puts in place to attract high-income clients by allowing health care professionals such as doctors and dentists to secure a mortgage with fewer restrictions than a conventional mortgage.
Common restrictions doctors run into are:
No cash
No job yet
No credit
Terrible debt-to-income ratio
Amazingly, some doctors think banks should lend them money just for being doctors. Well, you don't get a pass on math, but there are quite a few institutions that recognize that the financial lives of doctors are a little bit unique, that they aren't as bad a credit risk as their high debt-to-income ratio would suggest, and that they can bring other valuable business to the bank.
How Do Physician Loans Work?
Physician mortgages work similarly to conventional mortgages but are much more accommodating to physicians and their unique circumstances.
The main point is that a doctor can put down less than 20% and still avoid paying Private Mortgage Insurance (PMI). PMI is insurance that you pay for to protect the lender against you defaulting. Especially since paying PMI hasn't been tax deductible since 2021, it does no good for you. It is simply an expense.
Physician mortgages also generally only look at the total required student loan payment, not the total amount owed, and they will generally accept a signed employment contract as proof of income, rather than requiring tax stubs. Independent contractors often still need two years of tax returns to prove income.
Do Doctors Get Better Mortgage Rates?
Due to the lower down payment requirement and waived PMI there is typically a price to be paid to use a doctor loan. That price can come in the form of a higher interest rate (0.125% to 0.25% higher than a conventional mortgage) or in higher fees. However, it pays to shop around. Some doctors have found excellent rates and fees that are comparable to a conventional loan. Remember that mortgage rates change daily. Also, there's more than just the rate to compare—don't forget to take into account fees and points.
How Many Times Can You Use a Physician Loan?
The general rule is as many times as you want, although every bank has its own unique program with its own unique rules. Some will no longer extend physician loans to a doctor once they are more than 10 years out from school or residency. It is even possible to have more than one physician loan at a time as you move from house to house, but they are typically only offered on owner-occupied homes, not investment properties.
Can You Refinance a Doctor Loan?
Always read the paperwork carefully when signing for a loan, but most mortgages, including doctor mortgages, have no early repayment penalty. That means you can refinance them at any time. With a physician mortgage, it can make sense to refinance into a lower rate conventional mortgage after a few years because generally
Your income goes up,
Your debt-to-income ratio goes down,
Your credit score goes up,
Your mortgage has been paid down (increasing loan to value to more than 20%), and
Your home has appreciated (increasing loan to value to more than 20%).
So even if interest rates have not fallen, it can often make sense to refinance. If interest rates go down, that is an added bonus. Doctor mortgages are generally only for a home you are buying, so you typically do not or cannot refinance from one physician loan to another, but every program is different and is almost constantly changing so it makes sense to ask the lenders in the list on this page directly if you wish to refinance a doctor loan with another doctor loan.
Doctor Loan Eligibility
Most doctors (physicians and dentists) realize that these loans are designed for them. But many other professionals may not realize they also qualify.
Can You Qualify for a Doctor Mortgage with Student Loans?
Student loans that are in Income Dependent Repayment (IDR) programs (IBR, PAYE, REPAYE, etc.) get special treatment under physician mortgage loan programs.
“The mortgage underwriter will allow the lower income-driven repayment, as opposed to defaulting to a fully amortizing payment (as in a conventional loan). Also excluded is any student loan that is deferred for at least 12 months from the date of closing.”
What Credit Score is Needed for a Doctor Loan?
You'll need to maintain good credit in the 720-740 FICO score range to obtain a physician loan. However, under certain conditions, some of our recommended mortgage lenders will lend down to a 680 credit score if you have 6-12 months of cash reserves.
Frankly, if you have a credit score below 720, you probably aren't ready to be buying a house anyway. Pay off your credit cards (but don't necessarily close them as they can lower your score), don't miss any payments, and don't borrow any more money and you should have a score over 720 soon. It's not the end of the world to rent for a year (and it is often a very good idea if going to a new area or a new job anyway) and that is long enough to clean up your credit most of the time.
Are Doctor Loans a Good Idea?
I'm not necessarily against doctor mortgages, but I think most people ought to at least consider saving up a real down payment and delaying that purchase, especially if you're looking at getting that dream house right out of residency (or worse, buying a house during a short residency).
So why would someone want to use these loans? Usually, it's because they are in a rush to buy a house. After deferring gratification for 10-15 years, many of us are in a bit of a rush and we often have a much better use for our money than a down payment, such as maxing out retirement accounts or paying off student loans.
Pros and Cons of a Physician Loan
The main advantages of physician mortgage loans are:
No Private Mortgage Insurance (PMI): No PMI is required despite a down payment of only 0-10%.
Little to No Down Payment: 90-100% financing is available depending on property location, credit score, and loan amount.
Higher Loan Amounts Allowed: Physician mortgages have a higher loan limit than conventional mortgages. Typically you can expect to be loaned 95-100% up to $1 million and up to 90% for a $2 million loan amount.
Special Treatment of Student Loans: Even if you have hundreds of thousands of dollars in student loan debt, you can still buy a house.
Close on Your Home Before You Begin Working: You don’t have to wait until you begin employment to qualify for a mortgage loan. A contract in hand will be enough and some lenders don't even require that. Typically, lenders can close on your loan if you are 30-90 days before beginning employment.
Some disadvantages of using a physician mortgage loan:
You Don't Have a Down Payment: If you don't have savings for a down payment you need to ask if it's the right time to buy a home right now. This isn't a purchase to rush. Buy a home when your personal and professional life are both stable.
Buying More House Than You Should: Just because someone will lend you a lot of money doesn't mean the right financial move is to borrow it.
You Already Have a Ton of Debt: You may already have a net worth of a negative $200,000 or $300,000. How much more debt are you willing to add to that burden?
In my opinion, utilizing a Doctor Mortgage for an investment property is an unacceptable level of risk. The best way to ensure your investment property will have positive cash flow is to put down 25-35% in cash. And if you're going to do that, you don't need a physician mortgage. Perhaps there are some special circumstances where it can work out such as when you house hack by buying a duplex, live in one side and rent out the other or perhaps you just found an incredible steal of a deal on a property that will cash flow despite a tiny down payment. You will still need to live in the property at least for a year or two before turning it into an investment property.
You'll probably only be in that location for 1-5 years. It usually takes at least 5 years to break even on a home, obviously more if a real estate bubble bursts on you. The best resource to see how long it will take to break even in your particular circumstances is the New York Times Buy vs Rent Calculator. Even if you decide to stay in the same area as an attending, I've found that attendings don't usually like to live in their “resident home” for long once their income quadruples. For this reason, renting may be the best option for fellows and new residents.
A resident/fellow doesn't make very much money and usually takes the standard deduction on their taxes ($14,600 single and $29,200 married for 2024). That means your mortgage interest is probably NOT deductible. Even if you itemize, most of your interest probably isn't going to be deductible. That increases the effective cost of your shelter.
Homes require maintenance (expect 1-2% of the value of the home per year), which requires time and money, neither of which are abundant to a resident.
There is a lot of hassle and expense involved with buying and selling a home. Renting a home is quick and easy by comparison. If you've ever tried to sell a home in a down market you know how tough it can be to sell it at any price, much less a reasonable one. Plus, there is a great deal of flexibility with renting. If you don't like the neighborhood, you just move. At worst, you're in for a one-year contract. No big deal. New attendings, on the other hand, are much more likely to stay put and the interest is much more likely to be fully or nearly fully deductible. The buy/rent ratio sways heavily toward buying for most.
Physician vs. Conventional Loan
If you've decided to buy a home, and you are committed to living in an area for more than five years, you should give serious consideration to putting 20% down and getting a conventional mortgage. The improved monthly cash flow will allow you a great deal of financial freedom and the ability to invest (and even spend). You'll save hundreds of thousands on interest over the life of the loan, all guaranteed, unlike investing a potential down payment elsewhere. But if, for whatever reason, you're going to buy a home AND you can't or don't want to put 20% down, then a doctor's loan is a reasonable option and at least as good as the other non-20%-down options.
Alternatives to Physician Mortgage Loans
If you don't believe a traditional physician mortgage loan is right for you, you may be wondering what other options a doctor may have? It turns out plenty, and you can usually get most of these options from the same lenders who do physician mortgage loans.
Conventional 20% Down Mortgage
Conventional mortgages are loans that are not guaranteed by the Federal government. They are often the best choice for a mortgage as they generally offer the most options (30-year fixed, 15-year fixed, ARMs, etc.), the lowest fees, and the lowest rates. However, conventional mortgages require proof of earnings and a substantial sum of money to put down. That money, of course, becomes unavailable to invest or pay down student loans.
80/20 and 80/10/10 Loans
These disappeared from the scene after the 2008 Global Financial Crisis, but have been making more of a resurgence since. The theory is that you would get an 80% loan at a slightly higher rate than on a 20% down loan, then get a 20% loan at a much higher rate. You would avoid PMI replacing it instead with more interest. The 80/10/10 and 80/15/5 were variations on the theme, with a down payment required.
Conventional Mortgage with Less Than 20% Down
These loans have higher rates and fees than a 20% down mortgage. They also require you to purchase PMI. 3-5% down payments are common.
FHA Loan
FHA Loans are used by those with credit scores as low as 550 and/or those with down payments as low as 3.5%. This loan has higher rates and fees than a 20% down conventional loan—most notably, a 1.75% Upfront Mortgage Insurance Premium (UMIP) financed on top of the principal loan amount. In Addition to the UMIP, you'll also pay a required monthly Mortgage Insurance Premium (MIP) (0.8-0.85% of the loan balance annually) for the life of the loan.
The FHA requires the lender to use the credit report amount of the student loan payment, or if none listed, 1% of the outstanding balance unless the borrower can provide documentation that the loan is in deferral. This makes this loan tricky for indebted residents to qualify for. The rates are generally, however, slightly lower than a doctor loan, but may not be when you add in the mortgage insurance costs.
VA Loan
This loan requires that you qualify for VA benefits, which disqualifies many. It is an improvement on the FHA loan in that there is no down payment nor mortgage insurance requirement. Rates are similar to FHA rates, but the funding fee is higher—2.15% for first-time borrowers and 3.3% for subsequent use. That fee may be waived if you have a military disability rating.
How Much House Can I Afford with a Physician Loan?
You will find that banks will generally loan you more money than you should really borrow. They use guidelines like the 28% and the 36% rule. Basically, they'll loan you money until the mortgage payment is no more than 28% of your pre-tax income and your total debt payments cannot use up more than 36% of your pre-tax income. However, that's really an insane amount of mortgage debt for a doctor to take on. If you do that, you will almost surely have severe difficulty building wealth.
Run the numbers to see. Imagine a doctor with a $400,000 annual pre-tax income. 28% of $400,000 is $112,000, or $9,333 per month. How much house does that buy and how big is that mortgage? Let's assume this doctor put 10% down and gets a 30-year fixed mortgage at 3.5%. That's basically a $2 million mortgage on a $2.2 million house. That's a 5X debt-to-income ratio. Do not do that.
I have two rules of thumb for doctors who actually wish to build wealth. The first is to keep all housing-related costs to less than 20% of gross income. That includes the mortgage, property taxes, insurance, and utilities. The second rule is much easier to use: keep your mortgage to less than 2X your gross income. It's even better at 1X. Using that rule of thumb, our doctor making $400,000 could have a mortgage of up to $800,000. With a 20% down payment, that would equal a $1 million house. Want more house? Save up a bigger down payment or figure out a way to make more money.
In high cost of living areas such as the Bay Area, Manhattan, and the District of Columbia, sometimes a doctor has to stretch this rule a bit. If you are in that situation, realize two things. First, stretching means going to 3-4X gross income, NOT 10X gross income. Second, you will need to make up for this stretch somewhere else in your financial life. That might mean:
Fewer, less expensive vacations
Driving older cars for longer
Not putting kids into private school
Sending a partner to work
Working longer
Retiring on a smaller nest egg
There's no free lunch. You don't get a pass on math just because you live in San Jose.
Should You Get as Big a Loan as Possible and Invest the Difference?
When you run the numbers, you can easily see you'll be better off borrowing as much money as possible and investing it at a higher interest rate. This is the benefit of leverage. Consider a hypothetical $500,000 home. You could save $235,000 using a 20% down conventional loan over the doctor's loan. But if you invested that $100,000 down payment at 8% over 30 years, you'd end up with over $1 Million. The terms of this “margin investing” are favorable, in that you have a lot of time for the market to rebound and there are no margin calls on mortgages. Unfortunately, there are a few reasons why you probably don't want to do this:
Getting a lower interest rate on the mortgage is risk-free. That $235,000 is guaranteed. The $1 Million is not guaranteed. If there is anything the stock market has taught us over the last decade, it is that there are no guarantees. Risk of loss is very real. If you get 2% returns over the 30 years instead of 8%, you'd have been far better off with the lower rate mortgage.
Being underwater on a mortgage is no fun. Putting 0% down means you are immediately underwater since it generally costs 6-10% of the value of the home to sell it. If you think it is hard to sell a home in a down market, try doing it when your only options are a short sale, coming up with tens of thousands in cash, and letting the bank foreclose and ruining your credit.
Behavior. It is much easier to spend money than to invest it. To come out ahead you have to actually invest and keep investing that $100,000 for 30 years. Taxes and investment expenses, of course, can also reduce the rate of return on that money if you have poor investor behavior.
Cash flow and investing the difference. Putting 20% down lowers your mortgage payment dramatically. Again taking that $500,000 home example. With 20% down, your monthly principal and interest payment could be around $2,000. With the doctor's loan, it may be closer to $2,800. That $800 a month could really make a difference in your budgeting—giving you more spending and savings options as they become available. You can even use that $800 a month to pay down the mortgage by getting a 15-year fixed mortgage instead. That would lower your interest rate another ¾%, saving you even more over the years and allowing for earlier retirement. Alternatively, you could just invest the $800 each month. At that same 8% rate of return, after 30 years you would have $1.2 Million, even more than the $1 Million that $100,000 down payment would grow to. So overall, if you invested the difference after 30 years of 8% annual returns, you'd come out over $400,000 ahead by putting 20% down. But, of course, you still have to come up with the 20% to put down, which isn't easy.
Need a Realtor or Relocating?
If you are in need of a realtor the White Coat Investor partners with CurbsideRealEstate.com, a free real estate concierge service for physicians, by physicians. After struggling through his first home purchase, Dr. Peter Kim founded Curbside Real Estate to address physician-specific issues encountered during the home buying process. In addition to providing news and information, CurbsideRealEstate.com is your physician-led “curbside consult” for physician mortgage loans, expert real estate agents, relocation, and everything in between. Whether you’re securing your first physician home loan, just beginning your home search, or you're not sure where to start, CurbsideRealEstate.com can help you navigate the home buying process confidently and efficiently, saving you valuable time and money.
Exclusive bonus for White Coat Investor readers: $100 bonus at closing.
Equal Housing Lender. Member NCUA. Rates and Programs can change anytime without notice.
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NMLS #402132 and all loans subject to underwriting approval and guidelines
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Conditions and restrictions may apply. You may qualify by using your future income to purchase, prior to your new employment start date and using a lower payment for student loans than required by other lenders.
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The Cash Back Disclosure:
While the DFCU Financial Board of Directors intends to pay Cash Back every year, and has done so since 2007, Cash Back is not guaranteed and will depend on our financial performance and other factors. Annual Cash Back payments are limited to an aggregate of $10,000 for each tax-reported owner. The IRS requires that Cash Back for an IRA be paid to the same IRA, and that it be open when Cash Back is deposited. Cash Back to Commercial / Business Banking members is subject to additional terms. Anyone who causes DFCU Financial a loss for any reason is not eligible for Cash Back.
Loans are subject to credit review and approval. Closing costs may apply. Liberty FCU mortgage lending product availability may vary based on property location. A sample principal and interest payment on a (7)-year $500,000 adjustable-rate loan amount with a 3.500% interest rate (3.575% APR) is $6,719.93. Taxes and insurance are not included; therefore, the actual payment obligation will be greater. Actual interest rate may vary based on credit history. Additional rates and programs available. Visit us online for current rate information. Contact a Liberty FCU mortgage loan officer for more details.
1 Rate Match Guarantee available for new purchases and refinanced first mortgage loans of primary residences with conventional conforming financing. Certain product exclusions may apply. Loan Estimate from competing lender must be dated and received within three calendar days prior to locking your interest rate at Liberty FCU. The terms of the competing loan must be identical to Liberty FCU’s loan. If the loan does not close within the commitment period, the rate match may be voided. This offer is subject to credit approval and may change or terminate without notice. Offer is not applicable to government loans, including FHA, USDA, and VA financing. Not valid in combination with 1/8% rate discount. Product offerings may vary by state or region.
2 Gift card offer is available on financing of purchase or construction loans for primary residences only. Purchase or construction loan amounts up to $149,999 will receive a $250 gift card. Purchase or construction loan amounts of $150,000 or greater will receive a $500 gift card. Not valid in combination with any other offer.
3 Discount available on conventional conforming financing of purchases for primary residences only. Offer available for new primary mortgage loans and mortgage loans already established at Liberty FCU when refinanced with at least $10,000 new money. Closing costs may apply. Liberty FCU verifies the past checking history of applicants with ChexSystems, a national consumer reporting network. Information obtained from the report could result in checking account denial. Certain product exclusions may apply.
4 Available to residents, fellowship, newly established, or established physicians with MD, DO, DDS, DMD, OD, or DP credentials. Rates listed are specific to the Physician Loan mortgage program. Standard mortgage rates may vary.
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Subject to credit approval. Terms and conditions may apply. VA is subject to VA eligibility requirement. Property insurance is required for all loans secured by property.
The Federal Savings Bank | Co. NMLS# 411500 | All Rights Reserved | thefederalsavingsbank.com
Member FDIC | Equal Housing Lender
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Member FDIC/Equal Opportunity Lender
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Equal Housing Lender. Member FDIC.
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Equal Housing Lender. Member FDIC. NMLS #583593
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Member FDIC – Equal Housing Lender
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All products herein are subject to credit and property approval. Program terms & Conditions including interest rates, annual percentage rates (APRs) and points or fees are subject to change without notice. Your APR will vary based on your final loan amount and applicable finance charges. Not all products are available in all states or for all amounts: consult your mortgage loan originator for additional details. There are no restrictions to the length of time since the medical professional has completed their residency. All loans subject to credit and property approval.*Restrictions apply, consult your mortgage loan originator for additional details.
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Mortgage products are provided by Berkshire Bank: Member FDIC. Equal Housing Lender. Berkshire Bank is a Massachusetts chartered bank. All applications must be submitted in writing. All lending products are subject to credit and property approval. Products are not available in all states. Certain conditions and restrictions apply. Refinancing to reduce total monthly payments may lengthen repayment term or increase total interest expense compared with your current situation. Berkshire Bank NMLS 506896.
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Notice: This is not a commitment to lend or extend credit. Conditions and restrictions may apply. All credit products are subject to credit approval. Mortgage products are also subject to collateral approval. Hazard insurance and, if applicable, flood insurance are required on collateral property. Actual rates, fees, and terms are based on those offered as of the date of application and are subject to change without notice.
95% financing is only available to interns, residents, fellows, doctors, dentists, clinical professors, researchers, or managing physicians with a current license and a degree of Doctor of Medicine (MD), Doctor of Osteopathic Medicine (DO), Doctor of Podiatric Medicine (DPM), Doctor of Dental Surgery (DDS), or Doctor of Dental Medicine (DMD). Only available when purchasing or refinancing with no cash out on a primary residence and loan amount does not exceed $1,000,000. Retired doctors are not eligible. Additional conditions and restrictions may apply.
Only available to interns, residents, fellows, doctors, clinical professors, researchers, or managing physicians with a current license and a degree of Doctor of Medicine (MD), Doctor of Osteopathic Medicine (DO), or Doctor of Podiatric Medicine (DPM). Retired doctors are not eligible. Additional conditions and restrictions apply.[/scroll-box]
Green State Mortgage – A division of Green State Credit Union
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Equal Housing Lender. Member FDIC. Rates and Programs can change anytime without notice.
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Any financing over 100% must be used for taxes, insurance and other closing costs. Financing is available for eligible applicants and professions. Credit, income and collateral are subject to approval. Terms and conditions apply. Programs, rates, terms and conditions are subject to change without notice.