It’s common to hear that doctor loan programs require flawless credit or massive down payments, but you should know the truth: these programs are designed for medical professionals’ unique needs and often offer flexible credit guidelines, low or zero down options, and tailored debt-to-income considerations; this post will dispel five persistent myths so you can evaluate loans with confidence and make informed decisions about your home purchase.
Myth 1: Doctor Loan Programs Require Perfect Credit
Credit Expectations vs. Reality
If you have a FICO in the mid-600s, you may still qualify for many doctor loan programs; lenders often prioritize your residency or attending contract, specialty, and projected income over a perfect score. Some banks approve applicants with scores around 660-700 and allow 0-10% down, whereas conventional mortgages typically need 740+ for best rates. For example, a resident with a 675 score and strong employment contract recently closed on a $600,000 purchase with 5% down.
Myth 2: Doctor Loan Programs Are Only for Recent Graduates
Who actually qualifies
Many lenders approve applicants beyond residency-attendings with 2+ years’ post-training experience, physicians returning from fellowship, and established specialists. Some programs accept 0-5% down and waive PMI; others count projected income, so your signed employment contract or collection history can help. For example, a family physician earning $180,000 with $200,000 in student loans secured a 5% down doctor loan because the lender used projected income and adjusted DTI calculations. If you took a career break, lenders often review recent paystubs or contracts rather than graduation dates.
Myth 3: You Need a Large Down Payment
Down payment expectations for physician loans
Many physician loan programs offer 0-5% down and often waive private mortgage insurance for MDs, DOs, DDSs or DVMs with a residency or employment contract. You can finance $500,000-$1.5 million depending on the lender, so a 0% option could save you $20,000-$300,000 upfront versus a conventional 20% down payment. For example, a first-year resident purchased a $450,000 condo with no down payment and no PMI, trading a slightly higher rate for preserved cash flow during training.
Myth 4: Interest Rates Are Not Favorable for Doctor Loans
Rate Reality
Many lenders price physician loans competitively-often within 0.25-0.5 percentage points of conventional 30‑year fixed rates-while eliminating PMI and offering 90-95% LTV to new attendings. You can net a lower monthly outlay once avoided PMI and lender credits are included; for example, a 0.5% higher rate on a $600,000 loan adds roughly $175/month, but removing $150-300/month in PMI plus a 1% lender credit can make the doctor loan cheaper over the first five years.
Myth 5: Doctor Loan Programs Are Only Offered by Certain Lenders
Widespread availability across lender types
You’ll find physician loan options at national banks, regional banks, credit unions, and online specialty lenders; many waive PMI and offer 0%-10% down programs, with typical maximums between $1M and $2M. For instance, online physician lenders and some regional banks helped dozens of early-career physicians finance purchases last year, letting you buy a $700,000 home with little or no down payment while using residency income or recent contracts as qualifying income.
Benefits of Doctor Loan Programs
Key advantages
You often get 0-5% down payment options and no private mortgage insurance, which can save you thousands annually on a $300k-$600k purchase. Those programs typically accept residency or fellowship income and weight future physician earnings in underwriting, so a first-year resident making $60,000 recently bought a $350,000 condo with 0% down using one lender’s product. Underwriting also allows higher loan limits (many lenders offer $1M-$3M jumbo options) and rates that remain competitive, often within 0.25-0.50% of conventional loans.
Conclusion
With these considerations, you can separate fact from fiction about doctor loan programs: they often require lower down payments and offer flexible credit standards, your student debt doesn’t automatically disqualify you, competitive rates are available, and lenders account for residency or fellowship status-evaluate options and documentation to secure terms that match your career plans.
