Physician Loans 101

What are the “perks” of a physician loan?

• High financing levels: Some physician loans offer financing up to 100% of the purchase price of a home, or even as little as 5-10% down. Down payment amounts often vary by lender, with each offering its own unique loan product. So it’s important to shop around.

• No PMI: In conventional financing, lower down payment percentages often require additional fees in the form of private mortgage insurance (PMI). In most physician loans, the PMI fees will not be required.

• Flexibility on DTI qualification: Debt-to-Income (DTI) ratios are used in calculating borrowing capacity for lending. Physicians with significant student loan debt can still qualify for a physician mortgage, as student loans are treated differently when calculating the DTI ratio. This flexibility makes it easier for physicians to secure financing despite high student loan balances.

Employment & Income Verification

One of the key benefits of physician mortgage loans is that you can qualify based on an employment contract rather than traditional income verification like W-2s or pay stubs. This is particularly helpful for residents, fellows, or new physicians who are still in training or just transitioning to full-time employment. Lenders may require specific documentation from self-employed or contract physicians.

Eligible Professions for Physician Mortgages

Physician mortgage loans are primarily available to MDs and DOs, but today, many lenders extend these specialized loans to a range of healthcare professionals.

Professions that commonly qualify for physician loans include:

• Medical Residents

• Fellows

• Attending Physicians

• Dentists

• Podiatrists

• Veterinarians

• Optometrists

In addition to physicians, other valued healthcare providers such as CRNAs, PAs, and NPs may also be eligible for these loans. Loan qualifications can vary by lender, so it’s important to research each option carefully to understand the specific requirements before applying.