A doctor home loan is a portfolio loan program that offers home financing to licensed doctors with less than two years of experience practicing medicine.
At least one borrower must have one of the following licenses and school loans deferred for twelve months or more to be eligible for a doctor home loan.
- Medical Resident (Educational License)
- Medical Doctor (MD)
- Doctor of Dental Science (DDS)
- Doctor of Dental Medicine or Surgeon (DMD)
- Doctor of Optometry (OD)
- Doctor of Ophthalmology (MD)
- Doctor of Pediatric Medicine (DPM)
- Doctor of Osteopathy (DO)
Use a doctor home loan for the following transactions:
- Purchase – Finance the purchase of an existing home or new construction home.
- Rate & Term Refinance – Refinance any current mortgage loan(s) that were used to purchase a home that provides a financial benefit to the borrower by lowering the interest rate, monthly payment or removing mortgage insurance. Second mortgage loans that were not used to purchase the property can be subordinated to the new loan. Borrowers are unable to receive more than $2,000 cash back at closing. Texas residents may not receive any cash back at closing.
The maximum loan amount for a doctor home loan is $650,000 with a 700 FICO score and up to $850,000 with a 720 FICO score. A down payment is required.
The minimum down payment for a doctor home loan is 3% of a home’s purchase price. For a down payment less than 20%, you must have mortgage insurance.
Down payments of 20% or more do not require mortgage insurance.
Mortgage insurance protects the mortgage company against losses caused by a homeowner’s default on a mortgage loan. Mortgage insurance (or MI) typically is required if the homeowner’s down payment is less than 20% of the purchase price.
Mortgage insurance can be paid monthly or as a single premium at closing.
A doctor home loan may be used for the purchase or refinance of the following property types:
- Single family residence – one unit, detached
- Townhouse – one unit, attached or detached
- Condominiums – warrantable condos
- Planned Unit Developments – attached or detached
- Modular Homes – must have standard foundation
Credit requirements are more stringent than some other loan programs. You must have at least a 700 FICO score with two or more credit bureaus.
You may use a doctor home loan for the purchase or refinance of an owner-occupied property.