• Physician mortgage loans (also called medical professionals loans) offer special terms to help doctors, residents, and interns become homeowners.
  • Key benefits of physician loans include low down payments without private mortgage insurance (PMI) requirements, less stringent proof of income and employment requirements, and higher loan limits than conventional loans for licensed medical doctors who have completed their residency. 
  • Physician loans may charge higher interest rates than conventional loans to offset the increased risk to lenders. However, some of the higher interest expense may be offset by the savings realized from not having to pay monthly PMI. 

Being a doctor poses additional challenges to becoming a homeowner, such as high student loan debt, limited savings, and delayed earning potential. Fortunately, physician loans are designed to address these unique financial circumstances. Offering benefits like low down payments, no PMI requirements, and higher loan limits, these specialty mortgages make homeownership more attainable for doctors, residents, and interns. 

Whether you're just starting your career as a resident or intern, are looking to settle into your dream home, or are downsizing in preparation for retirement, a physician loan could be the financial solution for you.

What Is a Physician Loan?

A physician loan, sometimes called a doctor loan or medical professional loan, is a specialty mortgage designed to meet the unique financial needs of medical professionals as they look to become homeowners.

After years of university and medical school, doctors typically enter the workforce with higher levels of student loan debt than the average college graduate.[1] They may also lack the savings for a down payment because they enter the workforce later than their peers, giving them fewer years of earning potential before buying a home.

However, doctors tend to earn high incomes once they start practicing, particularly after completing their residency and/or fellowship. They may also qualify for student loan repayment assistance through the NHSC Loan Repayment Program, which would reduce their debt after serving for two years in an approved site, further changing their financial position.[2]

Mortgage lenders are often willing to accommodate doctors by providing low-down-payment physician loans with specialized product guidelines that can help make homeownership more easily attainable for doctors, residents, and interns. 

How Physician Loans Work

Doctors can use physician loans to purchase a primary residence under special terms and conditions, including:

  • Low down payments without PMI
  • Less stringent proof of income and employment requirements
  • Flexible loan terms
  • Higher loan limits
  • New construction accommodations
  • Higher interest rates

Here is a closer look at how physician loans work through the lens of these terms.

Low Down Payments Without PMI

Physician loans offer qualified buyers low down payments without requiring the borrower to carry private mortgage insurance. This is an important difference from conventional loans. With a conventional loan, borrowers who cannot afford a 20% down payment can get a lower down payment (as low as 3%), but only if they pay for PMI, an insurance policy that protects lenders against borrower default.

The minimum down payment depends on the lender and the borrower's qualifications, but you may be able to get a doctor loan with a down payment as low as 5-10%. Waiving the PMI requirement can potentially save you several hundred dollars per month in PMI fees.

Importantly, a lower down payment typically results in higher monthly payments and greater interest expenses over the term of the loan, so consider your down payment amount carefully. 

Less Stringent Proof of Income and Employment Requirements

Mortgage borrowers often have to provide proof of stable income through a combination of pay stubs and tax returns. However, for those applying for a physician loan, a valid and executed employment contract with a start date that commences within 120 days of closing. 

While conventional loans typically require two years of employment history, some lenders may accept school transcripts in lieu of employment for recent medical school gradutates. This can help allow newly graduated interns to buy their first home without waiting to establish two years of employment history.

Flexible Loan Terms 

Eligible medical professionals have the options of choosing between a fixed-rate mortgage, (offering fixe rate loan terms that range from 15 to 30 years) or an adjustable-rate mortgage, (offering initial fixed rate terms ranging from 5 to 10 years followed by a variable rate term with the full term being 30 years). Providing this loan term flexibility ensures clients can choose the best product that meets their financial needs.

Higher Loan Limits

There is a limit to how much a borrower can get with a conventional loan. For 2025, the standard loan limit is $806,500, while high-cost areas have a limit of $1,209,750.[3] However, with a physician loan, licensed medical doctors who have completed their residency may qualify for a higher loan limit up to $1,500,000.  

New Construction Accommodations

Some lenders make it easy to purchase a new-construction home with a physician loan. You might, for example, qualify for a one-time closing, eliminating the need for separate Interim Construction Financing. The new construction project would have to be complete at the time of closing.

Higher Interest Rates

In exchange for the many benefits provided by a physician loan, lenders typically charge a higher interest rate than they would for a conventional loan. However, some (or all) of the higher interest expense may be offset by the PMI savings. 

Pros and Cons of Physician Mortgage Loans

To recap, the benefits of physician loans include:

  • Low down payments 
  • No PMI requirement
  • Less stringent proof of income and employment requirements
  • Flexible loan term options 
  • Higher loan limits
  • Accommodations for new construction

And the potential downsides of physician loans include:

  • Comparatively high interest rates
  • Limitation to single-family primary residences

Who Qualifies for a Physician Loan?

Qualification requirements vary by lender, but physician loans are typically reserved for MDs, DOs, residents, and interns who meet the lender’s credit score, debt to income criteria and other product specific qualification requirements.

Physician Loans vs. Other Mortgage Loan Options

With multiple home loan types to choose from, it is important to consider your options before pursuing a doctor loan. 

Physician Loans vs. Conventional Loans

Conventional loans tend to offer lower interest rates than medical professional loans. However, with a conventional loan, you may be subject to a lower maximum loan limit (specific to licensed medical doctors who have completed their residency). And, if you put less than 20% down, you would likely need PMI, which may increase your monthly payment.[4]

Physician Loans vs. Jumbo Loans

Jumbo loans are loans that exceed the loan maximums set by Fannie Mae, Freddie Mac, and the Federal Housing Finance Agency.[5] Jumbo loans offer clients higher loan limits up to $5 million, while the maximum loan limit for medical professional loans is capped at $1.5 million (specific to licensed doctors who have completed their residency). Jumbo loans also require a higher down payment, typically starting at 15% depending on loan size and certain qualification requirements, compared to medical professional loans, which offer down payment options as low as 5% without requiring PMI).

Physician Loans vs. FHA Loans

FHA loans are backed by the FHA (Federal Housing Administration) to make homeownership accessible for buyers who don’t qualify for conventional loans. FHA loans offer down payments as low as 3.5%. However, unlike physician loans, they require mortgage insurance premiums (MIPS), which increase closing costs and monthly payments. 

Physician Loans vs. VA Loans

VA loans are specifically reserved for military service members, veterans, and their spouses. VA loans may offer lower interest rates, limited closing costs, higher loan limits up to $2 million, and the potential to qualify for zero down payment with no PMI. However, VA borrowers must pay a VA Funding Fee.[6]  VA home loans are also more limited in the available loan terms offered when compared to medical professional loans, with less loan term options to choose from for both fixed and adjustable rate mortgages.

The Bottom Line

Lenders are willing to accommodate the unique financial situation of doctors graduating with high student loan debt and low savings. Physician mortgage loans can help make homeownership more attainable for medical professionals by providing low down payments, higher loan limits, and no PMI.

Learn more about specialized loans and start planning your home purchase today!