Frequently Asked Questions About Physician Mortgage Loans

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  1. What is a Physician Loan?

A Physician home loan is a type of mortgage that offers unique terms not found with conventional loans. These loans are only available to healthcare workers such as doctors and dentists. The Physician Home Loan Program, or “doctor loan” makes it quick and easy for medical professionals to purchase a home. 

  1. What Makes A Physician Loan Different From A Conventional Loan?

These types of loans have more flexible guidelines and don’t have to fit exactly into the strict parameters set forth by Fannie Mae or Freddie Mac. However, guidelines differ from lender to lender. Doctor loans are also available with lower down payments – from 0% to 15%. Importantly, these types of loans don’t require PMI. Additionally, since healthcare workers often carry heavy med school debt, student loan burden is calculated differently and may not be included at all. These loans also have easier guidelines when it comes to proof of employment and many don’t have a cap on how much gift funds borrowers can receive.

  1. What Are The Main Two Main Benefits Of A Physician Home Loan?

The two of the main benefits are less of a down payment is required and there is also no mortgage insurance required. PMI protects the bank/lender if a borrower defaults or fails in making their payments. PMI is normally expensive and not tax deductible. However, with a physician mortgage loan, medical professionals are able to borrow 95% to 100% of the home price with no added PMI into the cost. 

  1. Who Qualifies For A Physician Loan? What Types Of Doctors Are Eligible?

Though this varies from lender to lender and bank to bank, in general Residents (MD), Fellows (MD), Attending (MD),Physicians and Doctors (MD), Doctors of Ophthalmology (MD), Doctors of Podiatric Medicine (DPM), Doctor of Osteopathy (DO), Doctors of Dental Science (DDS), Doctors of Dental Medicine (DMD) as well as as Veterinarians, Pharmacists and some Nurses qualify. 

  1. How Do Residents Or Fellows Qualify?

Residents can provide their Match Day letter followed by their Residency contract before closing on the home. The Match Day letter should include position, start date, and salary. 

  1. How Do Physician Loan Lenders Take Into Account Student Loan Debt? 

If a borrower’s credit report shows that student loans are in deferment or forbearance, the debt will not be counted against them or factored into the loan.

  1. What Is The Minimum Credit Score For A Physician Home Loan?

Most lenders will require at least a 680 credit score. 

  1. Do You Have To Be A U.s Citizen Or Permanent Resident To Qualify?

Yes,  Most doctor loans require borrowers to be a citizen or permanent resident. In some cases, a valid H1 Visa will also be considered. 

  1. What Type Of Loan Is A Physician Loan?  Conforming, Government Or Conventional?

Doctor loans are what’s called Portfolio loans though they do fall under the Conventional financing umbrella. Physician loans are not considered a Conforming Loan (Fannie Mae or Freddie Mac) or government (FHA or VA).

  1. Are Physician Loans Available In All 50 States?

Yes. However, not every lender in every state is able to lend.

MD Mortgage Loan has compiled a list of Physician Mortgage Lenders and Banks by state and qualifications. Qualified borrowers can narrow down the list to find the right lender for their individual needs. Sorting through industry-leading competitive rates that fit a variety of financing needs, is the first step.

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