doctor mortgage programs let you use your residency contract and projected earnings to qualify for a home loan before you finish residency, so you can secure a property in competitive markets. You should compare physician loan options, down payment and interest rate terms, and lender overlays, gather employment contracts and proof of income, and work with a mortgage broker familiar with doctor programs to maximize approval odds and favorable pricing.
Understanding Doctor Mortgage Loan Programs
These physician-specific mortgages let you buy during residency or fellowship by underwriting to your future attending income, not just your current stipend. Many lenders offer 0-10% down and may waive private mortgage insurance for eligible MD, DO, DMD, DDS borrowers (and sometimes NPs/PAs); typical options include 30‑year fixed or ARMs and loan sizes commonly ranging from $300k to $1M depending on market. You can use a signed employment contract to unlock higher approval amounts despite significant student debt.
What is a Doctor Mortgage Loan?
It’s a mortgage product designed for medical trainees where lenders consider your future physician salary and signed employment contract when underwriting. You may qualify with little or no down payment, and lenders often apply flexible debt-to-income treatment for deferred federal student loans. For example, some specialty lenders underwrite 30‑year fixed loans up to $750,000 based primarily on your attending offer rather than your residency stipend.
Key Benefits of Doctor Mortgages
These programs increase your purchasing power by lowering down payment barriers, reducing or eliminating PMI, and using your contract to justify higher loan amounts; that can let you move closer to a hospital or lock in a low rate early. Many trainees see $50k-$100k more buying power versus standard underwriting because lenders project future earnings instead of current, modest stipends.
For example, with $220,000 in student loans and a signed $250,000 attending contract starting in 12 months, specialty lenders may exclude deferred loans from your DTI or use a nominal payment (e.g., 0.5% of balance) to qualify you for a $450,000 mortgage with 0% down and no PMI, potentially saving several hundred dollars monthly compared with renting and preserving cash for relocation or licensing expenses.
How to Qualify for a Doctor Mortgage
Qualifying hinges on your employment contract, credit profile, debt-to-income ratio and down payment. Many physician loan programs offer 0-5% down and allow DTIs up to about 45-50% when you can document a signed residency or attending contract. Lenders often look for credit scores generally 680+ for the best pricing, 1-3 months of mortgage reserves in some cases, and whether student loan payments are treated as actual payments or via a percentage-of-balance calculation.
Eligibility Requirements
Most programs expect you to have finished medical school and be in residency, fellowship or holding a signed post-training employment offer; lenders typically accept contracts starting within 12 months of closing. You must occupy the property as your primary residence, and down payments often range from 0-5% depending on lender and loan amount. Some lenders will underwrite based on future attending income if your contract specifies start date and compensation.
Documentation Needed
Provide a signed employment or residency contract, medical school diploma or transcript, state medical license or board certification if available, recent pay stubs or stipend verification, lender statements for student loans, two months of bank statements, and W-2s or tax returns (usually one to two years if available). Lenders may also request a letter from your program director confirming status.
For student loan treatment, expect one of two common approaches: using your actual monthly payment from the servicer or applying a percentage-of-balance calculation (often 0.5%-1% of the total balance). For example, a $200,000 balance at 0.5% would be counted as a $1,000 monthly payment for DTI purposes. Confirm whether your lender needs signed contracts, license copies, 2-3 months reserves, or proof of any income-driven repayment plans to avoid surprises at underwriting.
Tips for Choosing the Right Loan Program
You should rank lenders by how they underwrite future attending income, down payment flexibility (some physician loans accept 0-5% down), and PMI rules; check whether co-signer release is allowed after 1-3 years. Also compare lender fees-1% origination on a $600,000 loan is $6,000-and turnaround time for pre-approvals. Knowing which tradeoffs reduce your out-of-pocket cost or speed approval will guide your choice.
- Underwriting to future income vs. current earnings
- Down payment minimums and PMI waivers
- Co-signer release terms and seasoning requirements
- Fees, rate locks (30-60 days), and float-down options
Comparing Interest Rates
Always compare APR, not just the nominal rate, because points and fees change true cost; a 0.5% rate reduction on a $400,000 30-year loan cuts the monthly payment by roughly $117 and saves about $42,000 over the loan term. Shop both fixed (15- and 30-year) and ARMs, and ask for illustrations showing payments at rate cap scenarios so you see downside exposure.
Interest Rate Comparison
| Rate Type | What to check |
|---|---|
| Fixed (30/15 year) | Stable payments; compare APR and discount points |
| Adjustable (ARM) | Initial rate, adjustment frequency, periodic/lifetime caps |
| Introductory offers | Watch reset terms and any index plus margin |
| APR vs nominal | Include fees/points to see true cost |
Understanding Loan Terms
You need to parse amortization schedule, prepayment penalties (rare but possible), balloon payments, and loan term options-15- and 30-year terms change monthly cashflow and total interest dramatically. Check DTI limits; many physician programs allow DTIs up to 45-50% with strong future income, and some waive PMI with as little as 5-10% down, which affects your lender choice.
Also review servicer policies: how they handle payment recasts, escrow shortages, and co-signer release timing. For example, a 15-year loan can cut interest paid by roughly half compared to a 30-year at the same rate, but raises monthly payments; confirm whether refinance or rate-modification fees apply if you plan to move from residency to attending within a few years.
Factors to Consider Before Applying
Weigh lender differences in down payment requirements, debt-to-income (DTI) tolerances, and whether they underwrite to a signed attending contract-many physician programs offer low or no down payment and may allow DTI to stretch to the mid-40s or higher when future income is documented. Check property type restrictions (condos vs. single-family), required cash reserves (commonly 1-6 months), and credit-score expectations, since these drive rate and approval likelihood. Recognizing which combination of terms matches your timeline and risk tolerance will narrow your lender choices.
- Down payment & PMI options (0-5% vs. traditional 20%)
- DTI treatment and student loan repayment exclusions
- Cash reserves and closing cost requirements
- Employment contract specifics and acceptable start dates
- Property eligibility (condo approvals, multi-units, new construction)
- Visa or licensure contingencies for international grads
Your Financial Situation
Audit your credit score, monthly obligations, and liquid reserves: many physician loan programs tolerate mid-600s to 700+ credit scores, and can underwrite to anticipated attending pay, but lender policies differ on excluding income-driven student loan payments. Run a scenario-if you plan a $350,000 purchase with 5% down, calculate how your current resident salary plus projected attending income affects DTI, and confirm required reserves (1-6 months) so you know upfront what cash you need at closing.
Future Employment Opportunities
Your signed employment contract and clear start date are often decisive; lenders typically want an offer within 6-12 months and will underwrite to stated base salary (for example, a $200k-$350k attending salary materially increases qualifying power). Fellowship, part-time roles, or partnership-track language can change how income is counted and may affect both approval and quoted rates.
Scrutinize contract wording: lenders prefer unconditional start dates, explicit base salary, and minimal contingency language-phrases like “subject to credentialing” can prompt extra documentation or conditions. If you’re on H‑1B/J‑1 status, verify lender acceptance and additional requirements. Provide clear bonus/call-pay documentation and a signed offer letter to maximize the chance of underwriting to your future compensation.
Step-by-Step Guide to Applying
| Step | Action |
|---|---|
| 1. Verify employment | Provide a signed residency/fellowship contract showing start date, specialty and attending salary projection (e.g., $200k-$400k); lenders underwrite to that future income. |
| 2. Gather documents | Collect 60-90 days of bank statements, recent paystubs, student loan statements, W-2s if available, and a credit report; some lenders accept substitute docs for residents. |
| 3. Choose program | Compare physician loans (often 0-5% down, no PMI) versus conventional/FHA; target lenders that allow higher DTI (up to ~50%) and underwrite to future income. |
| 4. Get pre-approved | Request pre-approval with your contract attached; many physician lenders can pre-approve within 3-7 business days, strengthening your offer. |
| 5. Close the loan | Submit full underwriting package; expect a 30-45 day close on average-confirm timelines and any rate-lock options before signing. |
Preparing Your Application
Start by assembling your signed contract, two recent pay stubs (or offer letter), 60-90 days of bank statements, student loan account statements, and a current credit report; lenders commonly look for a FICO of 680-720 for best rates, so if your score is lower, document stable income and low recent delinquencies to strengthen the file.
Finding the Right Lender
Compare at least three lenders on down payment (some offer 0-5%), PMI policies, DTI tolerance (some accept ~50%), and whether they underwrite to your future attending salary; request APR, points, and average close time-if one lender closes in 21-30 days versus 45, that can determine your ability to move before residency ends.
Dig deeper by asking lenders for physician-specific case examples: request a recent file where they approved a resident with $200k student loans and a 45% DTI, note whether they excluded deferred student loan payments, and confirm if they’ll accept a contract with a start date six months out; this practical comparison reveals underwriting nuances that quoted rates alone won’t show.
Common Mistakes to Avoid
You can avoid costly pitfalls by planning beyond the sticker price: factor in 2-5% closing costs, 2-6 months of PITI reserves, moving expenses, and higher insurance in urban markets. Underestimating ongoing costs like HOA fees, property taxes, or maintenance leads to stretched cash flow during residency when hours and income vary. Use concrete budgets and conservative income estimates so you don’t overextend on a loan that looks affordable on paper but squeezes your monthly budget.
Overlooking Costs
You might focus on low or zero down physician loan offers and miss hidden expenses: a $500,000 purchase with 3% closing costs equals $15,000 upfront, plus 1-2% origination or rate premium some lender programs add. Also plan for escrowed taxes/insurance, potential HOA dues, and emergency repairs-setting aside 3-6 months of housing costs prevents tapping credit during busy rotations or unexpected moves.
Ignoring Pre-Approval
You risk losing bids if you skip pre-approval: sellers and agents expect a lender letter, and in competitive metro areas with median days on market under two weeks, offers without pre-approval are often rejected immediately. Many lenders can issue physician-program pre-approvals in 24-72 hours when you provide a signed contract or residency verification, which boosts your credibility and negotiating leverage.
More detail: a solid pre-approval shows exact loan amount, estimated rate, and conditions and typically lasts 30-90 days; lenders for physician loans often accept a signed employment contract, residency agreement, or fellowship letter instead of two years of W‑2 income. Expect a credit pull, verification of student loan status (IDR vs. deferred), and documentation of any large assets for reserves. Physician programs may allow higher DTI-often up to 50-55%-but the pre-approval will flag debt that pushes you past lender overlays so you can adjust your offer or save additional reserves before writing contracts.
Final Words
Following this, you can confidently pursue a physician mortgage to buy a home during residency by leveraging specialty programs with low or no down payment, documenting future income and contracts, working with lenders who understand medical training, and aligning purchase timing with your relocation and repayment plans to protect your finances and career trajectory.
