Employment & Credit Score Requirements for Physician Loans

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The Doctor Mortgage Loan Program makes it easier for medical professionals to buy a new home with a much lower down payment, no required mortgage insurance (PMI) as well as special circumstances taken into consideration for Debt to Income Ratio (DTI) with regard to student loans. These special mortgage products allow professionals in the medical field to buy a home when they may otherwise be considered risks by conventional loan standards.

So who qualifies? 

A “qualified borrower” is normally defined as a Licensed Medical Resident, fellow, or attending physician with a signed contract for employment. This means you can get a mortgage prior to employment beginning.

The following is a list of licenses that usually qualify for doctor loans:

Those with D.P.M. degrees, P.A. (Physician Assistants), PH.D.s, and PSY.Ds may also qualify.  Some lenders may also include Nurse Anesthetists, Nurse Practitioners, and Clinical Nurse Specialists. For a full list refer to the MD Mortgage Loan website here

Usually, lenders allow potentially qualified borrowers to satisfy the employment requirement by producing an employment contract even before their residency begins. Additionally, some borrowers can qualify even if they have less than two years of self-employment or work as independent contractors.

  • Medical students, on the other hand, do NOT qualify for Doctor loans without an employment contract and a degree.

Though these mortgage products are designed with medical professionals in mind, they are still subject to many of the same rules. IE credit scores are still one of the most important qualifiers for a mortgage.  

Ultimately, credit informs what type of financing a bank will offer. Credit scores impact both approvals, down payment requirements (if any), and rates.

Five different criteria are used in computing credit scores:

  • Payment History (35%)
  • Credit Utilization (30%)
  • Length of Credit History (15%)
  • Credit Mix (10%)
  • New Credit (10%)

Credit card usage under 95% of available credit is optimal and potential borrowers can quickly improve their credit score by either paying off the amount before it’s due or asking for a credit limit increase – thus lowering the usage rate.

On average, even though the perfect credit score is 850, lenders will look for medical professionals to have a minimum credit score of 680 – 700.  If a potential borrower’s score is right under 680, it is possible to boost their score within several months using tools such as online credit help websites or bringing down their utilization.

The higher the credit score, the lower the interest rate. Borrowers with a 760 or above credit score receive the lowest interest rates. However many physician mortgage lenders offer the ability to purchase a lower credit score at closing time.  Many lenders offer medical doctors loans with a credit score of 670 or more.

Additional advantages of a Doctor Home Loan include:

  • Fixed rate options
  • Up to 100% financing and no monthly mortgage insurance payments
  • Higher maximum loan amounts though these are higher for attending physicians rather  than for interns, residents and fellows.
  • Employment contract can be used as evidence of income

The next important step would be to find a qualified lender to work with. However, not all banks or credit unions offer the doctor mortgage loan program. Not all financial institutions offer Doctor mortgage loans. 

MD Mortgage Loans can help find potential lenders – including the best fit when it comes to type of employment and credit score. Lenders and Banks are grouped by both state and qualifications.


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