Physician Loans: Your Complete Guide to Doctor Mortgages
- amykholparsons
- 4 days ago
- 16 min read
Updated: 3 days ago
QUICK ANSWER (Executive Summary)
A physician loan is a specialized mortgage program designed specifically for medical professionals including doctors (MD/DO), dentists (DDS/DMD), veterinarians (DVM), and pharmacists (PharmD). These loans recognize a doctor's future earning potential rather than penalizing current student loan debt, offering unique benefits like zero to low down payments (0-5%), no private mortgage insurance (PMI), and flexible debt-to-income (DTI) ratio calculations.
Physician loans help medical professionals—especially residents and fellows just starting their careers—purchase homes without the typical barriers that prevent other high-debt borrowers from qualifying. Unlike conventional mortgages that count student loans against your borrowing power, physician loans account for your employment contract and career trajectory.
INTRODUCTION
The Challenge Facing Medical Professionals
You've spent years in medical school, invested hundreds of thousands of dollars in your education, and committed to a career serving others. Now you're ready to buy a home but traditional mortgage programs see your six-figure student debt and close the door.
This is the paradox facing physicians, dentists, and other medical professionals: high earning potential paired with significant educational debt creates a financing gap that standard mortgage programs weren't designed to bridge.
Residency and fellowship salaries delay traditional home-buying timelines. Many doctors earning $60,000-$75,000 during training carry $200,000-$500,000 in student loans. Conventional mortgage underwriting calculates debt-to-income ratios that disqualify otherwise excellent candidates.
Physician loans bridge this gap by recognizing a doctor's future earning power rather than penalizing current student-loan debt. These specialized mortgage programs were created specifically to help medical professionals achieve homeownership without waiting years to pay down debt or save massive down payments.
WHAT IS A PHYSICIAN LOAN?
Definition and Purpose
A physician loan (also called a doctor mortgage or medical professional home loan) is a specialized mortgage product designed exclusively for licensed or soon-to-be-licensed medical professionals. Unlike conventional mortgages that rigidly apply debt-to-income formulas, physician loans recognize the unique financial profile of doctors: high student debt combined with exceptional future earning capacity.
Lenders offering physician loans understand that medical professionals represent extremely low default risk due to stable, high-income careers. This confidence allows them to waive requirements that would otherwise disqualify early-career doctors.
Who Qualifies for Physician Loans?
Eligible medical professionals typically include:
• Medical Doctors (MD)
• Doctors of Osteopathic Medicine (DO)
• Dentists (DDS/DMD)
• Veterinarians (DVM)
• Pharmacists (PharmD)
• Medical Residents (with signed employment contract)
• Fellows (with signed employment contract)
• Optometrists (OD) - select lenders
• Podiatrists (DPM) - select lenders
Some lenders extend physician loan benefits to orthodontists, oral surgeons, and other dental specialists. Eligibility varies by lender, so it's essential to verify your profession qualifies with your specific mortgage provider.
Why Lenders Offer Physician Loans
The rationale is straightforward: medical professionals have exceptionally low mortgage default rates. Doctors enjoy stable employment, high income trajectories, and professional licensing requirements that create accountability. Lenders compete for physician borrowers because they represent premium, low-risk clients.
This confidence allows lenders to offer terms that would be considered high-risk for other borrowers—such as zero down payment or excluding student loans from DTI calculations.
Key Terminology
Understanding these terms helps you navigate physician loan options:
• Physician Loan: The primary term for these specialized mortgages
• Doctor Mortgage: Common alternative name
• Medical Professional Home Loan: Broader term encompassing all healthcare professionals
• Contract Mortgage: Sometimes used when loan approval is based on signed employment contract rather than current income
HOW PHYSICIAN LOANS DIFFER FROM OTHER MORTGAGES
Comparison Overview
Physician loans offer distinct advantages compared to conventional, FHA, and VA loan programs. The table below highlights the key differences:
Zero to Low Down Payment Without PMI
The signature benefit of physician loans is the ability to purchase with 0-5% down without paying private mortgage insurance (PMI). Conventional loans require PMI when you put down less than 20%, adding $100-$300+ monthly to your payment.
Physician loans waive this requirement because lenders trust doctors' earning capacity and low default history. This saves thousands annually while preserving your cash for furnishing, student loan payments, or investments.
Flexible Debt-to-Income Calculations
Standard mortgages calculate DTI by dividing your total monthly debt payments by your gross monthly income. With six-figure student loans, this ratio often disqualifies doctors—even when they're not currently making payments due to deferment or income-driven repayment plans.
Physician loans handle student debt differently:
• Deferred loans: May not count toward DTI at all
• Income-driven repayment: Use actual monthly payment, not percentage of balance
• Contract-based approval: Future income from signed employment contract replaces current resident/fellow salary
This flexibility makes qualification possible when conventional programs would deny you.
Higher Loan Limits
Many physician loan programs offer limits of $1 million to $2 million or more—significantly higher than conforming conventional limits ($806,500 in most areas for 2025). This accommodates higher-cost housing markets and reflects lenders' confidence in physician income.
Trade-Off: Slightly Higher Interest Rates
Physician loans typically carry interest rates 0.125% to 0.5% higher than conventional mortgages. This premium reflects the increased risk lenders assume by waiving PMI and accepting lower down payments.
However, the total monthly savings from eliminating PMI often outweighs the higher interest cost—especially in the first 5-7 years of homeownership.
Example:
$500,000 home purchase
5% down ($25,000)
Conventional loan: 6.5% rate + $200/month PMI = ~$3,200/month
Physician loan: 6.75% rate, no PMI = ~$3,090/month
Net monthly savings: $110
Annual savings: $1,320
ELIGIBILITY AND REQUIREMENTS
Who Qualifies for a Physician Loan?
Core Medical Professions
The following professionals qualify for most physician loan programs:
• Medical Doctors (MD) - all specialties
• Doctors of Osteopathic Medicine (DO) - all specialties
• Dentists (DDS/DMD) - general and specialty practice
• Veterinarians (DVM)
• Pharmacists (PharmD)
Residents and Fellows
You don't need to be a fully practicing, attending physician to qualify. Medical residents and fellows commonly use physician loans—provided you have:
• A signed employment contract showing start date and salary
• Contract start date typically within 60-120 days of closing
• Valid medical license or proof of licensure in process
This "contract mortgage" provision is powerful: it allows you to purchase a home months before you start earning attending-level income.
Required Documentation
To qualify for a physician loan, you'll typically need:
1. Proof of Medical Credentials
- Medical degree (diploma or transcripts)
- Current medical license or pending license verification
- Board certification (if applicable)
2. Employment Verification
- Signed employment contract (for residents/fellows)
- Current pay stubs (for practicing physicians)
- Offer letter showing position, salary, start date
3. Financial Documentation
- Two years of tax returns (self-employed physicians)
- Recent bank statements
- Student loan statements
- Credit report authorization
4. Standard Mortgage Documents
- Government-issued ID
- Proof of down payment funds (if applicable)
- Purchase contract or property information
Credit Score Requirements
Most physician loan programs require a minimum credit score of 700, though some lenders accept scores as low as 680. Unlike FHA loans (580 minimum) or conventional loans (620 minimum), physician loans target borrowers with strong credit histories.
If your score is below 700, focus on:
• Paying down credit card balances below 30% utilization
• Ensuring all payments are current
• Disputing any errors on your credit report
• Waiting 3-6 months before reapplying
Student Loan Considerations
Physician loans treat student debt more favorably than conventional mortgages:
Deferred Student Loans
If your loans are in deferment, many physician loan programs exclude them entirely from DTI calculations.
Income-Driven Repayment Plans
Lenders use your actual monthly payment (which may be $0 or very low) rather than calculating 1% of the total balance.
Future Loan Forgiveness
If you're pursuing Public Service Loan Forgiveness (PSLF), make sure your lender understands your strategy and doesn't penalize you for temporarily low payments.
Can Fellows Qualify Before Starting Their Job?
Yes—this is one of the most valuable features of physician loans. If you're a fellow graduating soon with a signed attending position:
• You can close on a home 60-120 days before your start date (varies by lender)
• Lenders use your contract salary for qualification, not your current fellowship stipend
• You'll need proof that the contract is unconditional and binding
This allows you to secure housing in your new city without rushing or settling for rentals.
Can You Have a Non-Physician Co-Borrower?
Most physician loan programs allow co-borrowers, but benefits typically require the primary borrower to be a medical professional. If your spouse is not a doctor:
• You can still qualify jointly
• Their income counts toward qualification
• Their debts count toward DTI
• The non-physician co-borrower won't jeopardize physician loan benefits
PROS AND CONS OF PHYSICIAN LOANS
Advantages of Physician Loans
✅ Zero to 5% Down Payment
Purchase a home without waiting years to save 20% down. Preserve cash for student loans, furnishings, or investments.
✅ No Private Mortgage Insurance (PMI)
Save $100-$400 monthly compared to conventional loans with low down payments.
✅ Flexible Income Calculations
Lenders recognize future earning potential, not just current resident/fellow salary.
✅ Student Loan Accommodation
Deferred or income-driven loans receive favorable treatment in DTI calculations.
✅ Higher Loan Limits
Borrow $1M-$2M+ in high-cost areas, far exceeding conventional limits.
✅ Fast Approval for Contract-Based Income
Close on a home months before starting your new position.
✅ No First-Time Homebuyer Requirement
Physician loans are available whether this is your first home or you're moving up.
Disadvantages of Physician Loans
❌ Slightly Higher Interest Rates
Expect rates 0.125%-0.5% higher than conventional mortgages.
❌ Limited Lender Options
Fewer banks offer physician loans compared to conventional products.
❌ Profession-Specific Eligibility
You must prove medical credentials—family members can't "borrow" the benefit.
❌ Potential for Higher Long-Term Costs
If you stay in the home 10+ years, the higher interest rate compounds.
❌ Jumbo Loan Restrictions
Some physician loans have stricter requirements for loans exceeding $1 million.
Should You Use a Physician Loan?
Physician loans make the most sense when:
• You're early in your career with limited down payment savings
• You carry significant student loan debt
• You're relocating for a new position and need housing quickly
• You want to preserve cash for other financial goals
• You plan to stay in the home 5-10 years (then consider refinancing)
Physician loans may not be ideal if:
• You have 20%+ down payment available and can get a lower conventional rate
• You're planning to stay in the home 20+ years (cumulative interest costs increase)
• Your student loan debt is manageable and wouldn't impact conventional approval
TOP LENDERS OFFERING PHYSICIAN LOANS IN 2025
How to Find and Compare Physician Loan Programs
Not all lenders offer physician loans, and terms vary significantly between programs. Understanding what to look for and how to compare options ensures you get the best financing for your situation.
What to Look For in Physician Loan Lenders
When evaluating physician loan programs, compare these key features:
Down Payment Requirement:
• 0% down: Rare, but some programs offer zero down payment
• 3-5% down: Most common range for physician loans
• 5-10% down: Typical for jumbo loans over $1 million
PMI Policy:
• All physician loans should waive PMI regardless of down payment
• If a lender requires PMI, it's not a true physician loan
Loan Limits:
• Standard programs: $750,000 to $1 million
• High-balance programs: $1.5 million to $2 million+
• Ensure the lender's maximum accommodates your target purchase price
Student Loan Treatment:
• Deferred loans: Should be excluded from DTI or counted at $0
• Income-driven repayment: Should use actual payment, not 1% of balance
• Ask specifically: "How do you calculate DTI with deferred student loans?"
Eligible Professions:
• All programs include: MD, DO
• Most programs include: DDS, DMD
• Some programs include: DVM, PharmD, OD, DPM
• Verify your specific profession qualifies before applying
Contract-Based Approval
• Critical for residents and fellows
• Lender should accept signed employment contracts
• Typical window: 60-120 days before start date
• Ask: "Can I qualify based on a future employment contract?"
Interest Rates:
• Expect rates 0.125% to 0.5% higher than conventional
• Compare multiple lenders to find competitive pricing
• Rate depends on credit score, loan amount, and down payment Credit Score Requirements:
• Minimum: 680-700 (varies by lender)
• Competitive rates: 720+
• Best rates: 740+
Types of Lenders Offering Physician Loans
Large National Banks often have physician loan programs with:
• Widespread geographic availability
• Established brand recognition
• Local branch support in many markets
• Relationship banking benefits
Regional Banks and community banks may offer:
• Personalized service and local market expertise
• Flexible underwriting for local markets
• Competitive rates in their service areas
• Limited to specific states or regions
Credit Unions may provide physician loans with:
• Member-focused service
• Potentially lower rates
• Membership requirements (employment, location, or affiliation)
• Smaller loan limits in some cases Multi-Lender Brokers
Mortgage brokers with access to multiple physician loan programs offer:
• Ability to compare 3-5 lenders simultaneously
• Access to wholesale rates not available direct
• One application submitted to multiple lenders
• Guidance on which program best fits your profile
How to Find Physician Loan Lenders
Step 1: Start with Multi-Lender
Access Working with a mortgage broker who specializes in physician loans gives you:
• Access to multiple programs at once
• Side-by-side rate and term comparisons
• Expert guidance on which lender fits your situation
• Single point of contact throughout the process
LoanFactory's national broker network connects physicians with specialized lenders in all 50 states, allowing you to compare multiple physician loan programs and choose the best fit.
Step 2: Research Direct Lenders
• Search online: "physician mortgage loans [your state]"
• Ask colleagues: Which lenders did fellow physicians use?
• Check professional associations: State medical societies may have preferred lenders
• Contact your current bank: Ask if they offer physician loans
Step 3: Verify Program Details Before applying, confirm:
• Your profession qualifies (MD, DO, DDS, DVM, etc.)
• They serve your state and target purchase location
• Loan limits accommodate your purchase price
• They offer contract-based approval (if you're a resident/fellow)
• PMI is truly waived • Student loan treatment is favorable
Step 4: Compare at Least 3 Lenders Get quotes from multiple sources:
• Interest rate • APR (includes fees)
• Closing costs • Down payment requirement
• Loan limits
• Underwriting timeline
Regional Considerations for Physician Loans
High-Cost Markets
If you're buying in expensive areas (California, New York, Massachusetts, Florida metros, etc.):
• Prioritize lenders with high loan limits ($1.5M-$2M+)
• Ask about jumbo physician loan programs
• Expect slightly higher down payment requirements (5-10%)
Mid-Range Markets If you're buying in moderately priced areas (Texas metros, Midwest, Southeast):
• Most standard physician loan programs will accommodate
• Loan limits of $750K-$1M typically sufficient
• 0-5% down widely available
Rural Markets
If you're buying in smaller towns or rural areas:
• Verify lender serves your specific county
• Regional banks may have better local knowledge
• USDA loans may also be an option (separate from physician loans)
NATIONWIDE PHYSICIAN LOAN ACCESS
Road to Home Solutions works with LoanFactory's national wholesale network, providing access to multiple physician loan programs for comparison. Whether you're in California or elsewhere in the U.S., we can help you explore specialized financing options tailored to medical professionals.
How It Works:
California Borrowers:
Amy Parsons handles your loan directly, providing personalized service from pre-approval through closing.
Out-of-State Borrowers:
Amy works with LoanFactory's national network of licensed agents to serve you in your state, providing the same physician loan expertise and access to multiple programs.
Benefits of This Approach:
- Access to multiple wholesale lender programs
- Compare rates and terms across lenders
- Specialized expertise in medical professional financing
- Seamless process regardless of your location
Contact Road to Home Solutions to discuss your physician, dentist, or veterinarian loan options.
Questions to Ask Every Lender
Before committing to a lender, ask them: About the Program:
1. "Is this a true physician loan with no PMI regardless of down payment?"
2. "What professions qualify? Do you include dentists, veterinarians, pharmacists?"
3. "What are your loan limits for physician loans?"
About Student Loans:
4. "How do you calculate DTI with deferred student loans?"
5. "If I'm on income-driven repayment, do you use my actual payment or 1% of the balance?"
About Contract-Based Approval:
6. "Can residents and fellows qualify based on signed employment contracts?"
7. "What's the maximum time between contract signing and loan closing?"
About Rates and Costs:
8. "What's your current rate for physician loans?" (Compare to conventional)
9. "What are total closing costs and lender fees?"
10. "Are there prepayment penalties?"
About Timeline:
11. "What's your typical timeline from application to closing?"
12. "How quickly can you issue a pre-approval letter?"
How to Compare Lender Offers
When you receive quotes from multiple lenders, create a comparison chart:
Choose the lender with:
✅ Competitive rate and APR
✅ Favorable student loan treatment
✅ Loan limits that fit your purchase price
✅ Reasonable closing costs
✅ Clear, responsive communication
Red Flags to Avoid
Be cautious of lenders who:
❌ Require PMI on physician loans (it's not a true physician loan)
❌ Count deferred student loans at 1% of balance
❌ Won't accept employment contracts for residents
❌ Have loan limits below your target price
❌ Quote rates significantly higher than competitors
❌ Pressure you to apply immediately without comparing options
❌ Can't clearly explain their physician loan program
Next Steps: Getting Pre-Approved
Once you've identified 1-3 potential lenders:
1. Submit pre-approval applications to your top choices
2. Provide complete documentation (degree, license, employment verification, financials)
3. Compare pre-approval offers side by side
4. Choose the lender with the best combination of rate, terms, and service
5. Begin your home search with a strong pre-approval letter Most physician loan pre-approvals are issued within 1-3 business days with complete documentation.
STEP-BY-STEP: HOW TO GET A PHYSICIAN LOAN
Step 1: Verify Your Eligibility
Before contacting lenders, confirm you meet basic requirements:
• You hold (or will soon hold) an MD, DO, DDS, DMD, DVM, or PharmD degree
• You have a credit score of 700+
• You have a signed employment contract (if resident/fellow) or current employment verification (if practicing)
Step 2: Gather Documentation
Collect the following documents before applying:
• Medical degree or transcripts
• Medical license (or proof of pending licensure)
• Signed employment contract or offer letter
• Two most recent pay stubs (if currently employed)
• Two years of tax returns (if self-employed)
• Bank statements (last 2-3 months)
• Student loan statements
• Government-issued ID
Step 3: Contact a Physician-Loan-Specialized Lender
Not all mortgage brokers are familiar with physician loans. Work with a lender experienced in medical professional financing:
• Search for "physician loan" programs at major banks
• Contact a mortgage broker with access to multiple physician loan products (like LoanFactory)
• Ask specifically about student loan treatment and contract-based income approval
Step 4: Get Pre-Approved
Pre-approval shows sellers you're a serious, qualified buyer. For physician loans, pre-approval is based on:
• Your future contract income (not current resident/fellow salary)
• Favorable student loan treatment
• Verified medical credentials
Timeline: Pre-approval typically takes 1-3 business days with complete documentation.
Step 5: Work with a Real Estate Agent (Ideally Dual-Licensed)
Once pre-approved, begin touring properties. Working with a dual-licensed professional like Amy Parsons ensures:
• You only tour homes that fit your budget and loan parameters
• Your agent understands physician loan nuances
• One point of contact handles both financing and property negotiations
Step 6: Make an Offer and Enter Contract
Your pre-approval letter strengthens your offer. Physician loan pre-approvals are particularly strong because they demonstrate:
• Stable, high-income career
• Lender confidence in your financial profile
• Serious buyer commitment
Step 7: Complete Underwriting and Appraisal
Once under contract:
• The lender orders a home appraisal
• Underwriting reviews your complete financial profile
• You may need to provide updated pay stubs, bank statements, or contract verification
Stay responsive during this phase—quick document turnaround keeps your closing on schedule.
Step 8: Clear to Close and Final Walkthrough
When underwriting approves your loan:
• Review and sign your Closing Disclosure (3 days before closing)
• Wire your down payment and closing costs as directed
• Complete a final walkthrough of the property
Step 9: Sign and Celebrate
At closing:
• Sign loan documents
• Receive keys to your new home
• Celebrate your transition from medical training to homeownership
Timeline to Close: Most physician loans close in 30-45 days from contract acceptance.
FREQUENTLY ASKED QUESTIONS
Can Medical Residents Qualify Before Starting Their Job?
Yes. If you have a signed employment contract with a start date within 60-120 days, most physician loan programs will approve you based on your future contract income rather than your current residency stipend.
This allows you to secure housing in your new city before relocating—avoiding rushed decisions or extended temporary housing.
Are Condos and Townhomes Eligible?
Yes. Physician loans work for:
• Single-family homes
• Condominiums (must meet lender condo requirements)
• Townhomes
• Multi-unit properties (some lenders allow 2-4 units)
Condo eligibility depends on the condo association meeting Fannie Mae or lender-specific standards (financial health, owner-occupancy ratios, etc.).
Can I Refinance Later Into a Conventional Loan?
Absolutely. Many physicians use a physician loan to purchase their home, then refinance 2-5 years later when they:
• Have 20% equity built up
• Can eliminate PMI with a conventional loan
• Qualify for lower interest rates due to improved DTI ratios
• Want to reduce monthly payments
Refinancing is a common strategy once student loans are paid down and income has increased.
What If I'm Self-Employed or Own a Practice?
Self-employed physicians can still qualify for physician loans, but documentation requirements increase:
• Two years of personal and business tax returns
• Profit and loss statements
• Business bank statements
• CPA-prepared financial statements
Lenders calculate self-employed income by averaging two years of adjusted gross income (AGI), so recent practice acquisitions or partnership changes can complicate approval.
Do Dentists and Veterinarians Qualify?
Yes. Most physician loan programs extend benefits to:
• Dentists (DDS/DMD)
• Veterinarians (DVM)
• Pharmacists (PharmD) - select lenders
• Optometrists (OD) - select lenders
• Podiatrists (DPM) - select lenders
Eligibility varies by lender, so verify your profession qualifies with your specific mortgage provider.
Can I Use a Physician Loan for Investment Properties?
No. Physician loans require owner-occupancy. You must intend to live in the property as your primary residence.
If you're interested in investment properties or multi-unit buildings where you'll occupy one unit, ask your lender about specific program rules. Some physician loans allow 2-4 unit properties as long as you occupy one unit.
How Does Military Service Affect Physician Loan Eligibility?
Military physicians may qualify for both VA loans (if eligible) and physician loans. Compare both options:
VA Loans:
• 0% down
• No PMI
• Funding fee (waived for disabled veterans)
• No loan limits (but funding fee increases above certain thresholds)
Physician Loans:
• 0-5% down
• No PMI
• Slightly higher rates
• Higher maximum loan limits
If you're a veteran physician, run the numbers on both programs to determine which saves you more money.
CONCLUSION & NEXT STEPS
Physician loans bridge the gap between medical training debt and homeownership, recognizing your future earning potential rather than penalizing current student loans. Whether you're a resident preparing to start your first attending position, a practicing physician relocating to a new city, or a dentist or veterinarian ready to buy, physician loans offer flexible, accessible financing.
Key Takeaways:
• Physician loans allow 0-5% down without PMI
• Lenders base approval on future contract income and exclude or defer student loan debt
• You can qualify months before starting your new position
• Slightly higher interest rates are offset by PMI savings and flexible qualification
If you're ready to explore physician loan options, Road to Home Solutions can help you navigate both the financing and property search process—whether you're staying in California or moving anywhere across the country.
CONTACT ROAD TO HOME SOLUTIONS
Amy Parsons
Dual-Licensed Mortgage Loan Officer & Real Estate Broker
Phone: (800) 591-9489
Email: amy@roadtohomesolutions.com
Loan Officer: LoanFactory, NMLS #693001
Real Estate Broker: Lionheart Pride, CalDRE #01489819
ABOUT AMY PARSONS
Amy Parsons founded Road to Home Solutions to bring clarity, transparency, and personalized guidance to every buyer's journey. As a dual-licensed mortgage loan officer and real estate broker, Amy understands both sides of the transaction for aligned advice from pre-approval through closing.
Amy Parsons specializes in physician loans through LoanFactory's wholesale network, giving you access to multiple lender programs for comparison. California borrowers: Amy handles your loan directly from application to closing. Out-of-state borrowers: Amy works with licensed LoanFactory agents in your state to provide the same specialized service and program access nationwide.
RELATED RESOURCES
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Equal Housing Opportunity
Road to Home Solutions provides mortgage and real estate services nationwide.
Licensing and roles are clearly identified for each transaction.
Written by Amy Parsons, Dual-Licensed Mortgage Loan Officer (LoanFactory, NMLS #693001) and Real Estate Broker (Lionheart Pride, CalDRE #01489819). Amy helps physicians, dentists, veterinarians, and medical professionals navigate specialized loan programs and find the right home—whether you're in California or relocating anywhere across the country.
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