What Are Doctor/Physician Loans?
Doctor loans — also called physician mortgage loans — are specialized mortgage products designed for medical professionals. These loans are portfolio products held by the originating lender rather than sold to Fannie Mae or Freddie Mac on the secondary market. Because lenders retain the loans on their own books, they can offer underwriting concessions that fall outside standard agency guidelines.
The core value proposition addresses two realities unique to medical professionals: high student loan debt relative to current income, and strong future earning potential that conventional underwriting does not adequately account for. A newly minted physician completing residency may carry $200,000 or more in educational debt while earning a modest training salary, yet conventional debt-to-income (DTI) calculations would make homeownership difficult or impossible under standard programs.
Key Features and Benefits
Physician loans share several defining characteristics that distinguish them from FHA, VA, and conventional loan programs:
- No private mortgage insurance (PMI). Most physician loans waive PMI entirely, even with down payments below 20%. This is the single largest financial advantage, potentially saving hundreds of dollars per month compared to conventional loans with equivalent down payments.
- Low or zero down payment. Many programs allow 0% down on loan amounts up to $750,000 and 5-10% down on amounts up to $1 million or more. Specific thresholds vary by lender. See down payment requirements by loan type for comparison.
- Favorable student loan DTI treatment. Instead of using the standard 1% of total student loan balance for DTI calculations, physician loan programs typically use the actual income-based repayment (IBR) amount — or in some cases exclude deferred loans entirely.
- Employment contract acceptance. Borrowers can often qualify using a signed employment contract rather than pay stubs, accommodating the transition from residency or fellowship to attending physician status.
Who Qualifies for a Physician Loan?
Eligibility varies by lender, but the following professionals typically qualify:
- Medical doctors: MD (Doctor of Medicine) and DO (Doctor of Osteopathic Medicine)
- Dentists: DDS (Doctor of Dental Surgery) and DMD (Doctor of Medicine in Dentistry)
- Other medical professionals: OD (Doctor of Optometry), DPM (Doctor of Podiatric Medicine), DVM (Doctor of Veterinary Medicine)
- Expanded eligibility (lender-dependent): Some programs extend to PharmD, PA, NP, CRNA, JD, PhD, and CPA holders, though terms may differ
Most programs require that borrowers be within 10 years of completing residency or fellowship training, though some lenders have no time restriction for practicing physicians. Residents and fellows actively in training programs typically qualify as well, often using their employment contract for the next position. Credit score requirements generally start at 700, though some lenders accept scores as low as 680.
Student Loan Debt Treatment
The student loan accommodation is central to how physician loans work. Under standard conventional underwriting, lenders calculate DTI using 0.5% to 1% of the total student loan balance as the assumed monthly payment — regardless of the actual payment amount. For a physician with $250,000 in student loans, that produces a phantom monthly obligation of $1,250 to $2,500.
Physician loan programs instead allow the actual IBR, PAYE, or REPAYE payment amount for DTI purposes. If a borrower in residency is paying $0/month under an income-driven plan, some lenders will use $0 for DTI. Others may use a nominal amount such as 0.25% of the balance or the actual IDR payment, whichever is greater. Borrowers participating in Public Service Loan Forgiveness (PSLF) programs also benefit, as the lower IDR payment is what counts.
Loan Limits, Rates, and Property Restrictions
Physician loans are not bound by conforming loan limits since they are portfolio products. Loan amounts commonly reach $1 million to $2 million, with some lenders going higher. However, down payment requirements typically increase with loan amount — for example, 0% down up to $750,000, 5% down from $750,001 to $1 million, and 10% down above $1 million.
Interest rates on physician loans are generally comparable to or slightly above conventional jumbo loan rates. Both fixed-rate and adjustable-rate (ARM) options are available. Because these are portfolio products, rate structures vary significantly between lenders, making comparison shopping essential.
Most physician loan programs restrict financing to primary residences only. Investment properties and second homes are typically excluded. The property must usually be a single-family home, townhouse, or condo — though condo eligibility may require additional lender review.
When a Physician Loan Makes Sense — and When It Does Not
A physician loan is most advantageous for borrowers who have high student loan debt, limited savings for a down payment, and are early in their medical careers. The elimination of PMI on a low-down-payment loan can represent significant savings over the first several years of ownership.
However, physician loans are not always the best option. Borrowers who qualify for VA loans may find equal or better terms with 0% down and no PMI. Those with 20% or more available for a down payment may secure lower rates through conventional or jumbo programs. Physicians who are further along in their careers with manageable DTI ratios should compare physician loan rates against standard products, as the rate premium on a portfolio product may outweigh the PMI savings. Use the framework in how to choose the right loan program to evaluate which option best fits your financial situation.