Physician Mortgage Loans Explained

Physician mortgage loans are specialized loan products designed specifically for doctors—offering benefits that traditional mortgages can't match. Zero down payment, no private mortgage insurance (PMI), and flexible underwriting that accounts for your unique financial situation as a physician.

This guide explains how physician mortgages work, who qualifies, which lenders offer the best terms, and most importantly—when they make sense and when they don't.

What Makes Physician Mortgages Different?

Traditional mortgage underwriting doesn't work well for physicians. You have high student loan debt, limited credit history, and little to no down payment saved—but you also have exceptional income potential and very low default rates. Physician mortgages recognize this reality.

Key Benefits of Physician Mortgages:

• 0-5% Down Payment: Often zero down with no PMI required
• No PMI: Even with less than 20% down, you avoid $200-400/month PMI
• Flexible DTI Ratios: Student loans often excluded or calculated more favorably
• Pre-Employment Approval: Can close before your first day of work with just a contract
• Higher Loan Limits: Often $1-2 million+, sometimes no cap
• Minimal Documentation: Streamlined underwriting for physicians

Who Qualifies for Physician Mortgages?

Eligible Professions (Varies by Lender):

• Physicians (MD/DO): All specialties typically qualify
• Dentists (DDS/DMD): Most lenders include dentists
• Podiatrists (DPM): Often included
• Optometrists (OD): Some lenders include
• Orthodontists: Typically qualify
• Veterinarians (DVM): Limited lenders

Career Stage Requirements:

• Residents/Fellows: Usually qualify with proof of upcoming attending position
• New Attendings: Prime candidates, even before first paycheck
• Established Physicians: Qualify if still practicing medicine
• Retired Physicians: Typically don't qualify (product is for active practitioners)

Documentation Needed:

• Medical license (or letter verifying upcoming license)
• Employment contract for new attendings
• Pay stubs or tax returns for established physicians
• Credit report (typically need 700+ credit score)
• Proof of assets for down payment and reserves

How Student Loans Are Handled

This is where physician mortgages really shine. Traditional mortgages calculate your debt-to-income (DTI) ratio using either:

• 1% of your total student loan balance monthly, OR
• Your actual monthly payment (whichever is higher)

For physicians with $300K+ in student loans, that's $3,000/month added to DTI—making it nearly impossible to qualify.

Physician Mortgage Approach:

Most physician mortgages handle student loans much more favorably:

• Income-driven payment plans: Use actual IDR payment (often just $500-1,000/month)
• Deferred loans: Exclude completely or use minimal calculation
• PSLF participants: Recognize you're paying minimum intentionally

Down Payment Options and Strategy

Typical Down Payment Tiers:

• 0% down: Often available up to $750K-$1M loan amount
• 5% down: May be required for loans $1M-$1.5M
• 10% down: Usually required above $1.5M

Should You Put Money Down Even If You Don't Have To?

Arguments for 0% down:

• Keep cash for emergencies and other financial goals
• Invest the difference for potentially higher returns
• Max out retirement accounts instead
• Build liquidity for opportunities

Arguments for putting 10-20% down:

• Lower interest rate (usually 0.25-0.5% reduction)
• Lower monthly payment
• Build equity faster
• Avoid being underwater if home values drop
• Psychological comfort of lower debt

Our recommendation: If you can comfortably put 10-20% down without depleting emergency funds or sacrificing retirement contributions, the rate reduction and lower payment usually make it worthwhile. But 0% down is perfectly fine if you'd rather maintain liquidity.

Physician Mortgage Rates vs. Conventional

Physician mortgage rates are typically 0.25-0.75% higher than conventional mortgages with 20% down. But this is often offset by:

• No PMI savings ($200-400/month)
• Ability to buy sooner (less time renting)
• Keeping cash invested instead of tied up in down payment

Rate Comparison (Example, January 2026):

• Conventional 20% down: 6.75%
• Conventional 5% down + PMI: 7.00% + $300/month PMI
• Physician mortgage 0-5% down: 7.25%, no PMI

Best Physician Mortgage Lenders

Terms vary significantly by lender. Always get quotes from multiple lenders to compare. Top physician mortgage lenders include:

National Lenders:

• SoFi: Up to $3M, 0% down available, competitive rates
• Laurel Road: Up to $1M with 0% down, well-established program
• Bank of America: Relationship pricing available, higher limits for private clients
• TD Bank: Strong Northeast presence, flexible underwriting
• Huntington Bank: Good Midwest coverage

Regional/Credit Union Options:

• Often better rates than national lenders
• More personalized service
• May have stricter geographic requirements
• Check credit unions in your state

What to Compare:

• Interest rate and APR
• Maximum loan amount
• Down payment requirements by loan size
• Student loan treatment (critical)
• Closing costs and origination fees
• Rate lock period
• Pre-employment closing option

When Physician Mortgages Make Sense

Perfect candidates:

• New attending with limited down payment saved
• Moving to new city for first attending job
• High student loan debt on PSLF/IDR
• Want to preserve liquidity for other goals
• Need to close before first paycheck

Also good candidates:

• Physicians wanting to buy sooner rather than save 20% down
• Established physicians buying second home/investment property
• Physicians with irregular income (1099 contractors)

When to Skip Physician Mortgages

Better alternatives exist if:

• You have 20%+ down payment saved → Conventional mortgage usually has better rate
• You have minimal student loans → Conventional underwriting isn't a problem
• You're buying a very expensive home → Rate difference compounds significantly
• You're financially conservative → May prefer the discipline of 20% down
• Market is declining → Don't want to be underwater with 0% down

Common Physician Mortgage Mistakes

Mistake #1: Not Shopping Multiple Lenders

Terms vary dramatically. One lender might require 10% down at $1M while another allows 0%. Rates can differ by 0.5%+ for the same borrower.

Mistake #2: Buying Too Much House

Just because you can qualify for $1.5M doesn't mean you should. Follow the 28/36 rule: housing costs shouldn't exceed 28% of gross income.

Mistake #3: Ignoring Total Cost

A slightly higher rate on a physician mortgage can still be cheaper than conventional + PMI. Run the actual numbers with real quotes.

Mistake #4: Buying Before You're Ready

Just because you can buy with 0% down doesn't mean you should buy immediately. Ensure you have:

• 3-6 months emergency fund
• Stable employment situation
• Plan to stay in area 3-5+ years
• Budget for maintenance and repairs

Mistake #5: Forgetting About Jumbo Loan Limits

Conforming loan limits are $766,550 in most areas (2026). Above this is "jumbo" territory with stricter requirements. Some physician mortgages have lower maximums than advertised for jumbo amounts.

Physician Mortgage Application Process

1. Pre-qualification (1-2 days): Basic financial info, get estimated loan amount
2. Pre-approval (3-7 days): Submit full documentation, receive commitment letter
3. Home search: Shop with confidence knowing your budget
4. Offer accepted: Begin formal underwriting
5. Appraisal ordered (7-10 days): Lender verifies home value
6. Underwriting review (7-14 days): Final verification of all documents
7. Clear to close (2-3 days): Final review and preparation
8. Closing day: Sign documents, receive keys

Total timeline: Typically 30-45 days from offer acceptance to closing. Can be faster with strong pre-approval and motivated seller.

Alternative Strategies

Strategy 1: Conventional Now, Refinance Later

If rates are high, consider a physician mortgage now, then refinance to conventional once you have 20% equity. This works well in appreciating markets or if you're making extra principal payments.

Strategy 2: Hybrid Approach

Put 10% down to get better rate, but not so much that you deplete savings. Balances lower payment with maintaining liquidity.

Strategy 3: Wait and Save

If you can comfortably save 20% down in 12-18 months, conventional mortgage will have better long-term cost. Especially true if home prices are stable or falling.

Final Thoughts

Physician mortgages are an excellent tool for doctors who want to buy a home without waiting years to save 20% down. They recognize your unique financial situation—high earning potential, low default risk, and temporary high debt-to-income from student loans.

But they're not always the best option. If you have substantial down payment saved, minimal student debt, or are buying an expensive property, a conventional mortgage might offer better terms.

Key takeaways:

• Shop multiple lenders—terms vary significantly
• Compare total cost including PMI, not just interest rates
• Don't buy more house than you need just because you qualify
• Maintain adequate reserves and emergency fund
• Consider your career timeline and geographic stability

Used strategically, physician mortgages allow you to build equity and enjoy homeownership years sooner—while preserving cash for other important financial goals like retirement savings and student loan payoff.