Doctors can take advantage of special mortgage programs that allow for lower down payments and purchase prices higher than normal conventional limits. These programs are offered to licensed medical doctors and residents, including dentists, optometrists, and pediatricians. While often a standard conventional or Jumbo loan are better options, for many doctors the benefits of this mortgage program can make a difference.
The main benefits are the higher loan amount, lower down payment, and excluding from debt calculations any deferred student loan payments that are deferred for 12 months from the closing date.
Loan amounts up to $650,000 are allowed with a 3% down payment. Loan amounts up to $850,000 are allowed with a 10% down payment. In many areas these loan amounts are greater than the FNMA maximum mortgage loan amounts.
The 3% down payment can be helpful.
The ability to exclude deferred student loan payments from debt to income calculations is an important benefit of the mortgage program. Only the deferred student loans for the borrower with the qualifying license can be excluded. The ability to exclude deferred student loans can make a difference for many doctors in how much home they can purchase.
Another benefit that can help some doctors to purchase is that projected income can be allowed in some cases, based on an employment contract. Similarly, there are guidelines for doctors who have less than 2 years employment.
Many doctors will find that standard conventional and Jumbo financing will be better options. For those doctors who benefit from this special mortgage program, these features can make a difference in their home purchase.