Physician Loans Guide: Mortgages & Financing for Doctors (Low Down Payment, No PMI)

For many medical professionals, the path to homeownership looks a little different. Years of training, student loan debt, and delayed peak earning can make traditional mortgage options difficult to access—especially for residents and new attendings. That’s where physician loans come in. Designed specifically for doctors and other healthcare professionals, these loans provide more flexibility and smarter terms tailored to the realities of a medical career. Whether you’re just starting your residency or a few years into practice, understanding physician loans can open the door to major financial opportunities.

What Exactly is a Physician Loan? (And Why Should You Care?)

Physician loans are special mortgage products offered to medical professionals who often carry substantial student loan debt but are expected to earn significantly more over time. These loans are built with that long-term earning potential in mind. Unlike conventional loans, physician loans don’t penalize borrowers for having limited savings or high educational debt. They offer benefits like little to no down payment and don’t require private mortgage insurance (PMI), which can translate into thousands of dollars in savings over the life of the loan.

From the lender’s perspective, physicians are seen as low-risk borrowers. Despite high debt, medical professionals tend to have stable careers, low default rates, and rising incomes. That makes them an appealing customer base, even if they’re early in their professional journey.

Is a Physician Loan Right for You? Quick Eligibility Check

Eligibility for a physician loan depends on your profession and where you are in your career. Doctors of medicine (MDs), osteopathy (DOs), dentistry (DDS/DMD), and veterinary medicine (DVMs) are typically eligible. Many lenders also include podiatrists, optometrists, pharmacists, and other specialized providers, though the terms can vary. Whether you’re a medical resident, fellow, or attending physician, you may qualify—sometimes with nothing more than a signed employment contract and proof of graduation.

The Big Picture: Types of Physician Loans

The most common type of physician loan is a mortgage loan, intended for buying a primary residence. These loans help physicians buy homes sooner by relaxing some of the traditional lending requirements. In addition to mortgages, there are also physician practice loans, which support the launch, expansion, or acquisition of a medical practice. Related financing like lines of credit or refinancing options are often structured with medical professionals’ financial timelines in mind, offering better terms and fewer barriers to access.

Deep Dive: Physician Mortgage Loans Explained

Physician mortgage loans are built to bypass the usual hurdles that prevent early-career doctors from securing financing. They often allow borrowers to purchase a home with as little as 0 to 5 percent down. Unlike conventional loans that require PMI if you put down less than 20 percent, physician loans typically waive this fee altogether. That single factor can save hundreds of dollars a month.

Another key difference is how lenders calculate your debt-to-income ratio. Instead of penalizing you for having high student loans, many lenders consider your actual monthly student loan payments under income-driven repayment plans like IBR, PAYE, or SAVE—rather than using the full loan amount. This approach allows borrowers to qualify even when their debt load is high on paper.

Physician loans often allow for higher borrowing limits, especially in expensive real estate markets. Many also qualify as jumbo loans, helping you secure a home in areas where traditional loan limits wouldn’t be enough. However, there are usually restrictions around how the property is used. These loans are meant for primary residences, not second homes or rental properties.

Interest rates on physician loans vary. Some lenders offer fixed-rate options for stability, while others provide adjustable-rate mortgages (ARMs) with lower introductory rates. While the interest rate on a physician loan might be slightly higher than a conventional loan, the absence of PMI can make the total cost more affordable. Comparing APRs—not just base rates—is essential for getting a true picture of the loan’s cost. It’s also important to consider points, fees, and other closing costs, which can vary widely between lenders.

Detailed Eligibility Requirements

To qualify, you’ll typically need to provide proof of your medical degree and license—or documentation showing that you’re about to begin employment, such as a signed job contract. A credit score of 680 or higher is usually required, although the better your score, the better your rate. Some lenders will also look for cash reserves covering a few months of mortgage payments, though this requirement can vary. If you’re early in your career and short on savings, you may still qualify based on projected income alone.

Weighing Your Options: Physician Loan Pros vs. Cons

There are many reasons why a physician loan may make sense for you. These loans make homeownership possible much earlier than traditional routes, especially since they don’t require a large down payment or PMI. They’re also more forgiving when it comes to student debt and allow for higher borrowing amounts in pricey markets.

However, these advantages come with trade-offs. Some physician loans carry slightly higher interest rates, which can result in higher long-term costs—particularly if you’re not planning to refinance later. If you choose an ARM, there’s also the risk of a rate increase after the initial period ends. Low down payments mean you start with less equity in your home, which could be a problem if property values decline. It’s important to be cautious about overextending yourself just because you qualify for a larger loan. If you’re uncertain about staying in one place for a few years, a physician loan might not be the right choice.

Physician Loans vs. The Alternatives: A Head-to-Head Comparison

Physician Loan – Pros:

Low to zero down payment required
No private mortgage insurance (PMI)
Flexible treatment of student loan debt
Designed specifically for early-career medical professionals

Physician Loan – Cons:

May have slightly higher interest rates than conventional loans
Typically limited to primary residences
Not always the best long-term option without refinancing

Compared to Conventional Loans:

Pros: Potentially lower interest rates with strong credit and 20% down
Cons: Requires a large upfront down payment to avoid PMI; less flexible with student debt

Compared to FHA Loans:

Pros: FHA loans allow low down payments and are accessible to a wider credit range
Cons: Always require mortgage insurance and have stricter property requirements

Compared to VA Loans:

Pros: VA loans offer 0% down, no PMI, and competitive rates
Cons: Only available to eligible veterans and service members

Bottom Line:
A physician loan is often the best fit if you’re early in your career, carrying student debt, and looking to buy a home without draining your savings.

Finding Your Lender: Top Providers & How to Choose

Several major national banks offer physician loan programs, along with regional banks, credit unions, and mortgage brokers who specialize in working with doctors. When choosing a lender, make sure to ask about how they handle student loan debt in the underwriting process, what property types they allow, and how experienced the loan officer is with physician loans. It’s also smart to compare APRs, origination fees, and closing timelines before making a decision. Some terms are negotiable—especially if you’re a strong candidate.

The Application Process: From Inquiry to Closing

Start by gathering your documents, including your ID, medical license, employment contract, bank statements, and credit information. While pre-qualification gives you an estimate of how much you can borrow, getting pre-approved is more powerful—it shows sellers you’re ready to move. Once you’re under contract, the underwriting process begins. Working with a lender who understands the unique financial profile of physicians can help speed up the process and reduce friction. At closing, you’ll sign your documents, pay any required fees, and officially become a homeowner.

Strategic Long-Term Planning with Your Physician Loan

A physician loan can be the first step in a long-term wealth-building strategy. While it helps you get into a home earlier, it’s often wise to refinance into a conventional loan once you’ve built equity and improved your credit. This can lower your interest rate and reduce your monthly payment. Over time, you’ll want to integrate your mortgage into a broader financial plan that supports other goals, like investing, saving for your children’s education, or funding a private practice.

Beyond Mortgages: Physician Practice Financing Overview

In addition to home loans, many lenders offer physician-specific business loans to help launch or grow medical practices. These may include financing for buying into a practice, covering equipment costs, or securing working capital. While this post focuses on mortgages, it’s worth exploring these options if practice ownership is part of your long-term plan.

Real-Life Examples: Physician Loan Case Studies

Take Dr. Maria, a first-year resident in Boston, who bought a two-bedroom condo close to her hospital using a physician loan with 0 percent down and no PMI. She locked in a fixed rate and kept her monthly payments manageable—even on a resident’s salary. Contrast that with Dr. Eric, a surgeon who opted for a large ARM loan early in his career. When rates reset after three years, his payments jumped significantly—straining his budget and forcing him to refinance earlier than planned. These stories show both the opportunity and the caution required when using this powerful financial tool.

Ready to Explore Your Options?

If you’re a medical professional considering homeownership, a physician loan could be your best path forward. At Fast Business Financial, we help connect you with trusted physician loan specialists, walk you through your options, and provide resources to help you make confident, informed decisions. Whether you’re buying your first home or planning to launch your own practice, we’re here to support your journey—smartly, strategically, and with your future in mind.