There’s a lot to weigh when comparing physician mortgage loan programs, and you should focus on down-payment waivers, interest rates, loan terms, eligibility tied to residency or employment, student loan treatment, and lender reputation; systematically compare costs, underwriting flexibility, and post-close support so you can choose the program that minimizes your upfront cash needs and long-term costs while matching your career stage and risk tolerance.
Understanding Physician Mortgage Loans
Underwriting often treats your future earning trajectory differently than a standard borrower: lenders typically accept employment contracts, residency positions, or incoming attending salaries and may exclude some student loan payments from debt-to-income ratios. You can see 0-5% down options with PMI waived on many loans up to roughly $1 million, and lenders commonly allow higher loan limits and flexible DTI calculations to accommodate heavy student debt while you transition into attending-level pay.
What is a Physician Mortgage Loan?
It’s a specialty mortgage designed for physicians, dentists, and certain allied professionals that lets you buy with little or no down payment, often without private mortgage insurance, and uses employment contracts or residency stipends in underwriting. Typical features include 0%-5% down, loan limits that frequently reach $750k-$1.5M depending on the lender, and more lenient treatment of student loans compared with conventional products.
Benefits of Physician Mortgage Loans
You gain immediate buying power and cash savings: avoiding PMI can save roughly 0.5%-1% of the loan annually (on a $400,000 loan that’s about $150-$330 per month), and low/no down options mean you don’t need a 20% down payment-$80,000 on that same home-upfront. Additionally, flexible DTI rules and acceptance of future income let you purchase earlier in training or immediately after signing an attending contract.
For example, a resident earning $60,000 who signs an incoming attending contract at $300,000 can use that contract to qualify; this enabled Dr. Patel to close on a $420,000 house with 0% down and avoid roughly $220/month in PMI, preserving savings for relocation and furnishing while locking in home equity growth earlier in her career.
Key Factors to Consider
When comparing physician mortgage programs, focus on lender eligibility windows, loan maximums, PMI waivers, underwriting for residency or fellowship income, and fee transparency; also weigh typical closing timelines (21-45 days) and whether the lender accepts signing bonuses or future income in qualifying.
- Interest-rate spreads and origination fees can change long-term costs more than small rate differences.
- Loan caps vary-some lenders offer up to $1M+ while others stop at $750K; check local limits and conforming thresholds.
- Thou must verify PMI rules, seasoning requirements, and whether the lender allows J1/H1 or nontraditional documentation.
Interest Rates and Loan Terms
Rates depend on lender pricing and your profile; many physician programs run within 0.25% of conventional loans while some add 0.5-0.75%. For example, a 0.25% gap on a $1,000,000 mortgage increases your monthly payment by roughly $200. Check fixed vs ARM options, initial teaser periods, and permanent rate caps before deciding.
Down Payment Requirements
Physician loans often allow 0%-5% down: zero-down typically applies up to $750K-$1M, and 5% covers larger balances. If you put 10-20% down you’ll usually secure a better rate and reduce or avoid PMI sooner; confirm each lender’s LTV caps and whether blocks like bonuses count toward funds.
If you finance $800,000 with 0% down you borrow the full amount; with 5% down you put $40,000 upfront, lowering your LTV and monthly payment. PMI on low-down loans commonly runs 0.3%-1% annually-on $800K that’s $2,400-$8,000 per year-so you should weigh upfront cash versus ongoing PMI and verify whether the lender offers PMI waivers at specific LTV thresholds or specialty-based exceptions.
How to Evaluate Lenders
Researching Lender Options
You should map lenders by type – national banks, regional banks, credit unions and specialty physician lenders – then compare terms: down payments from 0-10%, loan caps commonly $500K-$3M, and eligibility during residency versus attending status. Check underwriting speed (7-21 days), required reserves, and documented cases where a resident closed with $0 down and an attending used future income to qualify; those examples show real flexibility differences you’ll face.
Research checklist
| Lender type | National vs specialty – impacts underwriting flexibility and service |
| Down payment options | 0-10% typical for physician loans; confirm PMI rules |
| Loan caps | Ranges $500K-$3M; verify max for your market |
| Documentation | Accepts contract/offer letters, resident pay stubs, or future income? |
| Turnaround | Typical 7-21 days; faster lenders reduce rate-lock risk |
Comparing Loan Programs
You’ll want to contrast physician-specific products against conventional and jumbo options: physician loans often waive PMI, allow higher DTI (43-50%), and use employment contracts as income verification, while conventional loans reward 20%+ down with lower rates. Consider whether you prefer a 30-year fixed for stability or a 5/1 ARM if you expect to refinance in 3-7 years; interest spreads on physician products may be ~0.25-0.5% above best conventional offers.
To decide, weigh total cost: a physician loan that saves $250-$500/month in PMI might cost 0.25% more in rate, yet still be cheaper over 3-5 years when you factor closing costs and expected tenure. Use a side-by-side amortization for your purchase price and projected selling/refinance timeline to see which program wins.
Program comparison examples
| No-PMI physician loan | Best if you have <20% down and plan to hold 3-7 years; saves monthly PMI |
| Conventional 20%+ down | Lowest long-term rate; ideal when you can put 20% or more down |
| Jumbo physician loan | Useful for purchases above conforming limits (varies by county); often flexible underwriting |
| ARM (5/1 or 7/1) | Good if you expect to refinance or move within the fixed period; lower initial rate |
Tips for Applying for a Physician Mortgage Loan
Prioritize lenders that accept employment contracts and check loan maximums (many physician programs exceed $1M) while confirming PMI waiver policies and eligibility windows-some accept offers up to 6 years out. Assemble preapproval materials early, expect underwriters to request bank statements, pay stubs, and student loan documentation, and aim to keep your front-end and back-end DTI below ~40% to access better terms. After you review the checklist below, verify timelines and document formats with each lender.
- Get a written preapproval using your employment contract; many lenders turn these around in 3-7 days.
- Provide 2-3 months of bank statements and 1-2 recent pay stubs; include bonus/guaranteed comp schedules if applicable.
- Document student loans (IDR vs. deferred) with 12 months of statements to clarify qualifying payments.
- Target a credit score ≥720 for best pricing; scores 680-719 often still qualify but at higher rates.
- Have 1-3 months of PITI as reserves unless the program explicitly waives reserve requirements for attending physicians.
Preparing Your Financial Documents
Gather your signed employment contract, two recent pay stubs, W‑2s or 1099s for the last 1-2 years, and 2-3 months of bank statements showing your down payment source; include retirement account statements if used for reserves. Add written explanations for large deposits, a copy of any relocation/loan forgiveness agreements, and student loan statements showing payment status or IDR documentation to speed underwriting decisions.
Improving Your Credit Score
Lower revolving utilization below 30% (ideally under 10%), pay off high‑interest balances first, keep long‑standing accounts open, avoid new hard inquiries within 3-6 months, and set autopay to eliminate late payments-these steps push scores into the 700s that lenders favor for physician programs and better rates.
You can often see measurable score improvements within one to two billing cycles after reducing utilization; for example, cutting a $6,000 balance on a $10,000 limit (60%→0%) typically yields a meaningful boost. Disputes for reporting errors can take 30-45 days; adding a small installment loan or becoming an authorized user can help diversify your mix over 2-6 months. Plan credit moves 3-6 months ahead of application to show stability.
Special Considerations
You should weigh program-specific terms like down payment, loan limits, and underwriting flexibility: many physician loans offer 0-5% down and loan caps commonly between $1M and $3M, while underwriting often accounts for future attending income and allows higher DTI (sometimes up to ~50%). Pay attention to whether the lender accepts residency or employment contracts, offers interest-only or deferred payment options during training, and has geographic or property-type restrictions that could affect eligibility or pricing.
Loan Eligibility for Residents and Fellows
You can often qualify during residency or fellowship with a signed employment or future attending contract; several programs accept contracts dated within 6-12 months and permit interest-only or deferred payments until you start as an attending. Lenders typically require proof of enrollment, loan deferment status, and student debt balances; for example, a PGY‑3 with $200k in student debt and a signed attending contract frequently secures financing with minimal down payment under physician-specific guidelines.
Location-based Loan Variations
Your market matters: high-cost metros commonly push borrowers into jumbo physician products with higher loan limits and different pricing, while some lenders limit programs by state or avoid co-op buildings entirely. In New York City and Boston you may need lenders who finance co-ops or offer loans >$1.5M; in many Midwestern or rural areas standard physician programs suffice and underwriting may be more conservative due to local price stability.
Dig deeper into lender footprints and product nuances: some lenders cap loans at $1-1.5M while others extend to $2-3M with 5% down for qualifying physicians, and a handful operate only in 20-30 states. You should confirm whether the lender will finance condos, co-ops, or mixed-use properties, how local property taxes and insurance affect escrow, and whether appraisal requirements differ in your county before locking a rate.
Making the Right Choice
Balance lender terms against your career timeline and cash needs: many physician loans offer 0-5% down, loan limits commonly $1-2M+, and underwriting that accepts future earnings with DTI allowances up to ~50-55%. If you value liquidity for relocation, partnership buy-in, or a cash cushion, a 0% down option may beat a lower-rate conventional loan that ties up 20% of your capital. Run side-by-side scenarios with exact rates, closing costs, and PMI to see real monthly and five-year costs.
Assessing Your Financial Situation
Map your liquid reserves, student loan status, and monthly obligations: aim to keep 3-6 months of expenses beyond closing costs. Compare PMI impact (0.3%-1% annually; on a $500,000 loan that’s $1,500-$5,000/year) versus using cash to lower LTV. If you earn $250k but carry $60k in student loans, some physician programs still approve higher LTVs-verify each lender’s DTI and student-debt treatment before choosing.
Long-Term Financial Goals
Match loan structure to horizon: plan to stay 10+ years and prefer stability, choose a fixed-rate physician mortgage; expect to move in 2-4 years and prioritize cash, consider low-down or ARM options. Also weigh investment opportunity cost-deploying $50k into a practice or index funds at projected 6-8% may outperform locking that cash into equity reduction at a 3-4% mortgage rate.
Run concrete breakeven math: if refinancing costs $3,000 and a rate cut saves $2,000/year on a $400,000 balance, you recoup costs in ~1.5 years. Similarly, $50,000 invested at a 7% return versus a 4% mortgage yields about $1,500 extra annually (50,000*(0.07-0.04)), useful for comparing long-term growth against interest savings when selecting a physician loan.
Final Words
Now you can confidently compare physician mortgage programs by evaluating down payment expectations, interest rates, loan terms, fees, and lender experience with physicians. Get preapproved, verify eligibility and documentation, and prioritize lenders offering flexibility for residency, signing bonuses, and relocation. Align choices with your career stage, cash flow, and long-term financial goals to find the best fit.
