Best Physician Mortgage Loans

Mortgage loans with no or low down payments for medical professionals

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Physician mortgage loans allow both practicing medical professionals and those in training to qualify for a mortgage despite their high student loan debt and sometimes low income resulting from just getting started in their careers. Although interest rates are a little higher for physician mortgage loans, borrowers will often have lower down payment requirements or no cash down requirements at all.

We looked at physician mortgage loans based on borrowing limits, down payments, credit requirements, fast turnaround, and more. Here are our top picks.

Best Physician Mortgage Loans of 2021

Best Overall : KeyBank

KeyBank

 KeyBank

Why We Chose It: KeyBank offers mortgage loans for medical professionals with a high borrowing limit, fixed and variable rates, and no mortgage insurance requirements.

What We Like
  • Borrowing limit up to $3.5 million

  • Offers fixed or variable rates

  • No PMI required

What We Don’t Like
  • Minimum 5% down payment required

  • Loans only available in 15 states

Based in Albany, New York, KeyBank offers banking, credit card, and loan services in 15 states. It’s our choice for the best overall because it offers fixed- and variable-interest physician mortgage loans with multi-million-dollar limits and doesn’t require borrowers to purchase mortgage insurance.   

KeyBank offers some of the highest borrowing limits we’ve come across, allowing physicians and dentists to take out mortgages of up to $3.5 million. The bank’s Medical Professional Mortgage loan allows borrowers to purchase both owner-occupied primary residences and second homes, including single-family homes, condos, and planned unit developments.

KeyBank also doesn’t require medical professionals to purchase private mortgage insurance (PMI) with their mortgage loan. Borrowers will need to make a down payment depending on the amount they borrow: 

  • 5% down for loans up to $1 million
  • 10% down for loans up to $1.5 million
  • 15% down for loans up to $2 million
  • 25% down for loans up to $3.5 million

Applying for a mortgage loan requires speaking to a representative who will walk you through your choice of fixed or variable loan rates.

Best for Great Credit : Flagstar Bank

Flagstar Bank

 Flagstar Bank

Why We Chose It: Flagstar Bank offers mortgage loans with no down payment on loans up to $850,000 and no PMI required for medical professionals with excellent credit.

What We Like
  • Borrow up to $850,000 with no money down

  • Available in all 50 states

  • No PMI required

What We Don’t Like
  • Only offers adjustable-rate mortgages

  • Credit score of 710 or higher required

Founded in 1997, Flagstar Bank is the sixth-largest mortgage originator, with 160 branches in five states. It’s our choice as the best for great credit because it offers mortgage loans up to $850,000 with no down payment for borrowers with excellent credit scores.

Flagstar Bank offers mortgage loans in all 50 states for medical professionals, including residents, nurse practitioners, veterinarians, dentists, dental surgeons, and more. Although the bank doesn’t offer fixed-rate mortgages, its high borrowing limits and low to no down payment requirements make it an attractive option for first-time homebuyers

Flagstar Bank lets medical professionals with a credit score of at least 720 borrow up to $850,000 with no money down. Those with a credit score of 710 can borrow up to $1 million with 5% down or $1.5 million with 10% down. Regardless of the loan size, the bank does not require borrowers to have PMI.

Flagstar Bank also allows non-occupant co-borrowers on a loan and gives borrowers the option to close up to 60 days prior to the start of employment with a signed contract.

Best for Poor Credit : Simmons Bank

Simmons Bank

 Simmons Bank

Why We Chose It: Simmons Bank allows medical professionals to qualify with poor to fair credit for fixed- and adjustable-rate mortgage loans with no down payment and partial financing for closing costs.

What We Like
  • Finances up to 2% of closing costs

  • Choice of fixed or adjustable rates

  • Close up to 60 days prior to employment

What We Don’t Like
  • No online application available

  • Only available in seven states

Simmons bank was founded in 1903 and offers banking, loan, and investment services from 200 locations in seven states. It’s our choice as the best for poor credit because it offers no-down payment mortgages for medical professionals with low credit scores.

Simmons Bank’s Professional Provider Mortgage is available to physicians, oral surgeons, and dentists who have completed their schooling and who are in residency. Borrowers have a choice of a fixed, adjustable, or balloon mortgage and can purchase a single-family home, condo, or new construction.

Simmons Bank requires no money down on mortgage loans up to around $400,000 and flexible down payments for higher amounts. You can also finance up to 2% of your closing costs for loans up to $750,000.

Medical professionals with a credit score of at least 640 can qualify for a mortgage, although the Simmons Bank also considers applicants with lower scores. The bank doesn’t have an option to apply online, so you will need to speak to a loan representative. 

Note that Simmons Bank only serves Arkansas, Colorado, Illinois, Kansas, Missouri, Oklahoma, Tennessee, and Texas.

Best for Ease of Application : SunTrust

SunTrust

SunTrust 

Why We Chose It: SunTrust offers generous mortgage financing for both medical interns and practicing doctors with an easy online application process.

What We Like
  • 100% financing up to $750,000

  • Fixed- and adjustable-rate mortgages

  • No PMI required

What We Don’t Like
  • Preliminary depository relationship required in some states

  • Not available in Alaska, Arizona, Hawaii, or Oregon

Originally founded in 1891 as the Trust Company of Georgia, SunTrust offers a variety of banking, mortgage, insurance, and asset management services. It’s our pick as the best for ease of application because it takes you step by step through applying for a loan online with the option to talk to someone on the phone at any point.

SunTrust’s Doctor Loan Programs offer fixed and adjustable mortgage options for medical professionals at any stage of their careers. Licensed residents, interns, and fellows in MD, DO, and DPM programs can get 100% maximum financing for home loans up to $750,000. Practicing doctors (MD, DO, DPM, DDS, DMD) can also get 95% maximum financing for loans up to $1 million and 89.99% for loans up to $1.5 million.

To be eligible for SunTrust’s Doctor Loan Programs, you must also participate in the company’s Private Wealth Management group. Eligible practitioners will enjoy favorable repayment terms for purchases and term/rate refinances and no monthly mortgage insurance payments. 

Some states require a preliminary depository affiliation and physician loans are not available to homebuyers in Oregon, Hawaii, Arizona, and Alaska.

Fastest Turnaround Time : University Federal Credit Union

University Federal Credit Union

 University Federal Credit Union

Why We Chose It: University Federal Credit Union offers mortgage loans for both practicing medical professionals and those still in training with approval and funding in just a month.

What We Like
  • Available for medical professionals in training

  • Quick approval and funding with in-house processing

  • No PMI required

What We Don’t Like
  • Lower loan limits with no down payment

  • Must be a member of the credit union

  • Not available in all states

Chartered in 1936, University Federal Credit Union offers banking, loan, and investment services to more than 300,000 members in over 200 universities, associations, and employers in Central Texas. It’s our pick as the fastest turnaround time because it uses in-house processing to secure loans in as little as 30 days. This allows applicants to make competitive offers on homes and close much faster. The credit union also has a loan exception committee that assesses applicants who may not qualify with traditional underwriting.

University Federal Credit Union offers physician loans to both practicing medical professionals (MD, DO, DDS) and those still in training. Residents and fellows can qualify for mortgage loans up to the $400,000 range with no money down or up to $1.5 million with a down payment based on the loan size. None of University Federal Credit Union loans require PMI payments.  

In order to be eligible for a physician mortgage, you must be a University Federal Credit Union member, which involves being employed by a company, enrolled in a school, or part of an association in the union’s field of membership.

Best for Low Down Payment : Fulton Bank

Fulton Bank

 Fulton Bank

Why We Chose It: Fulton Bank offers physician mortgage loans with 100% purchase financing for loan amounts up to $1 million and only 10% down for up to $2 million with no mortgage insurance payments.

What We Like
  • $0 down payment up to $1 million

  • Close up to 90 days prior to employment

  • No PMI required

What We Don’t Like
  • High credit score requirement

  • Only available in five states

Founded in 1882, Fulton Bank offers banking, lending, mortgage, and investing services in Pennsylvania, New Jersey, Maryland, Delaware, and Virginia. Medical professionals can borrow up to $1 million with no money down and enjoy low down payments for higher amounts, making it our choice as the best for a low down payment.

Fulton Bank’s physician mortgage loans allow medical professionals including physicians, pharmacists, dentists, and veterinarians to borrow up to $1 million with no money down with a choice of either a fixed- or adjustable-rate loan. Borrowers will need to put down a down payment for larger amounts based on how much they borrow: 

  • 0% down for loans up to $1 million
  • 5% down for loans up to $1.5 million
  • 10% down for loans up to $2 million

Fulton Bank requires borrowers to have a credit score of at least 700 to qualify but does not include student loan payments deferred for 12 months or longer in the credit approval process. The bank also allows up to 6% seller-paid closing costs and doesn’t require borrowers to make PMI payments.

Final Verdict 

If you’re a physician looking to purchase a home, there are a number of options available to you, even if you have student loan payments, bad credit, or a small down payment. KeyBank is our choice as the best overall because it offers the highest borrowing limits we’ve come across with flexible down payment options, fixed and variable rates, and no mortgage insurance requirements.

Flagstar Bank wins the best for great credit since it lets medical professionals with a credit score of 720 borrow up to $850,000 with no money down with low down payments for higher amounts. Borrowers with credit scores of 640 or slightly lower can qualify for a mortgage up to $400,000 with no down payments from Simmons Bank, making it the best for poor credit.

SunTrust’s simple online application for both practicing medical professionals and those still in training secure its spot as the best for ease of application, while University Federal Credit Union wins the fastest turnaround with loan approval and funding available in as little as 30 days.

Finally, we chose Fulton Bank as the best for low down payment since it lets medical professionals borrow up to $1 million with no money down and offers low down payments for mortgage loans up to $2 million.

Compare Providers

Lender Category Notable Features
KeyBank Best Overall Borrow up to $3.5 million with no PMI
Flagstar Bank Best for Great Credit Borrow up to $850,000 with no money down or PMI
Simmons Bank Best for Poor Credit No-down payment mortgages for credit scores around 640
SunTrust Best for Ease of Application Easy online application for all medical professionals
University Federal Credit Union Fastest Turnaround Time Approval and funding within 30 days
Fulton Bank Best for Low Down Payment Borrow up to $1 million with no money down or PMI

Frequently Asked Questions 

What’s Different About a Physician Mortgage Loan?

A physician mortgage loan lets medical professionals borrow money for a home up to a certain amount with no down payment and no private mortgage insurance, which banks typically require for mortgages with less than 20% down.

Because medical professionals have a significant amount of student loan debt compared to other borrowers, they often find it difficult to qualify for conventional mortgages. Physician mortgage lenders look at a doctor’s earning potential rather than their debt to determine eligibility. A contract showing that a physician will be starting a job within the next two to three months is also enough to make a borrower eligible for a loan.   

What Is The Average Current Interest Rate for a Physician Mortgage Loan?

Because physician mortgages don’t have a private mortgage insurance requirement, lenders often offer interest rates 0.125% to 0.25% higher than a conventional mortgage. As of February 10, 2021, a conventional 30-year fixed mortgage rate averaged 2.82%. By extension, the same mortgage often to a physician would average between 2.94% and 3.07%.  

How Do I Qualify for a Physician Mortgage Loan?

Physician mortgage loans are typically offered to medical professionals with MD, DO, DPM, DDS, and DMD degrees. Professionals can either be practicing or still in training (intern, resident, or fellow) though practicing professionals will have higher borrowing limits.

Lenders will also look at a physician’s credit score to determine eligibility. While a score over 700 will get you a more competitive rate, a score as low as 640 or below can still qualify you for a physician mortgage loan.  

What Does a Physician Mortgage Loan Cost?

The cost of a physician mortgage loan varies by lender. While most will save you money by not requiring you to pay for private mortgage insurance, you will typically have to pay for closing and title costs. As mentioned earlier, physician mortgage loans also have a slightly higher interest rate, which can increase your monthly payment.   

How We Chose the Best Mortgage Loans for Physicians

We looked at over two dozen physician mortgage loans for this review. We made sure to choose lenders that offered no money down and low down payment loans and no private mortgage insurance requirements to help medical professionals with large debt loads buy their first home.

We also looked at lenders who offered the best borrowing limits and flexible down payments for borrowers with both great and poor credit. Finally, we made sure to include lenders that offer an easy application and quick funding to allow physicians to compete with other home buyers.  

All of the lenders we selected have competitive rates, require no or low down payments, are available for a range of credit scores, and have high lending limits.

Article Sources

  1. NextAdvisor. "Mortgage Interest Rates Today, February 10, 2021 | Rates Tick Down." Accessed February 10, 2021.