A physician mortgage loan is a specialty product that some banks offer to doctors, residents, and fellows. It usually allows a low or no down payment, often skips private mortgage insurance, and treats student loans and a signed-but-not-started employment contract more flexibly than a standard loan. If you are a physician in Glen Allen, Short Pump, or Innsbrook, you have probably been told it is the only way to buy with little down and heavy student debt.
It is not the only way. I should also be plain about my own position: I do not offer physician loans. What I do offer are standard programs, including conventional, FHA, VA, refinance, and renovation financing, and for many doctors they get to a similar place. Six ways to use them follow.
By Duane Buziak, NMLS #1110647, Glen Allen Mortgage by Duane Buziak
1. Use a Conventional Loan With 5% Down and Plan for PMI Removal
The closest standard-program substitute for a physician loan is a conventional loan with a small down payment. You accept private mortgage insurance (PMI) for a period, and in exchange you keep your savings intact. For a resident or new attending facing moving costs, a security deposit overlap, and furniture, cash left after closing is often worth more than the PMI premium you avoid by putting 20% down.
PMI is also temporary. Under federal rules summarized by the CFPB, you can generally request cancellation once your balance reaches 80% of the home’s original value, and it is supposed to end automatically at 78% if you are current on payments. Check the details on the CFPB’s PMI removal page, since lender-specific conditions can apply.
Here is an illustration, not a quote. Suppose you buy a $500,000 home in Wyndham with a hypothetical 6.25% 30-year fixed rate:
- 5% down ($25,000): a $475,000 loan, roughly $2,925 per month in principal and interest, plus PMI.
- 10% down ($50,000): a $450,000 loan, roughly $2,771 per month, plus a smaller PMI charge.
- 20% down ($100,000): a $400,000 loan, roughly $2,463 per month, with no PMI.
The gap between 5% and 20% down is about $460 per month before PMI, and the PMI quote is what tells you the true difference. It depends on your credit profile, so it cannot be guessed.
Putting it into practice
- Ask for written quotes at 5%, 10%, and 20% down.
- Ask for the PMI cost at each level, and whether it is monthly or paid upfront.
- Ask what balance or value triggers PMI removal, and whether an appraisal would be required.
- Subtract each down payment and estimated closing funds from your savings to see what you keep.
The common mistake is comparing only the monthly payment. A $460 monthly saving is not much help if it leaves you with two weeks of reserves while you wait for your first attending paycheck. Measure the total monthly cost including PMI at each down payment level, the cash you hold after closing, and the number of months until PMI can come off.
2. Document Student Loan Payments the Way Underwriters Count Them
For many doctors, the student loan payment in the debt-to-income (DTI) ratio decides whether a file works. How that payment is calculated depends on how your loans are documented. When a loan is on an income-driven repayment plan and the paperwork clearly shows the payment, underwriters can often use that documented amount. When the paperwork is missing or unclear, they may fall back on a percentage of the balance, which is usually much higher.
Consider an illustration. Imagine a doctor with a $250,000 balance on an income-driven plan with a documented payment of $900 per month. If an underwriter instead assumed 1% of the balance, the payment counted would be $2,500. That difference of $1,600 per month in counted debt can move a back-end DTI from comfortable to out of range. The exact rules for income-driven, deferred, and forbearance loans are in Fannie Mae’s Selling Guide, and as of 2026 you should confirm the current treatment at fanniemae.com rather than relying on a rule of thumb. They change.
What to gather
- A current servicer statement for every loan, showing balance, status, and payment.
- Your income-driven repayment confirmation showing the payment amount and plan type.
- Documentation of any loan in deferment or forbearance, including when it ends.
- Your signed employment contract if you are about to start a new position.
Send these with the application, not after the underwriter asks. Then ask directly which loans are deferred and how each is being treated. The usual mistake is submitting an old statement or a plan letter that does not state a payment. The underwriter cannot guess in your favor, so the higher assumed payment gets used.
To measure the effect, calculate your back-end DTI twice: once with the assumed payment, and once with the documented payment. That difference tells you how much the paperwork was worth.
3. Check VA Eligibility if You Served or Are Serving
If you served, or are serving, you may not need a physician loan at all. VA financing generally allows a purchase with no down payment, and it does not carry monthly mortgage insurance. For an eligible doctor it works much like what a physician loan promises. Plenty of physicians first qualified through a military scholarship or a prior enlistment and never think to check.
The trade-off is the VA funding fee, a one-time charge that varies with your down payment and whether it is your first or a later use of the benefit. Veterans receiving VA compensation for a service-connected disability are generally exempt. The current schedule is on the VA funding fee page, and as of 2026 you should confirm it there before you plan around any figure.
Imagine a veteran physician buying a home near Innsbrook with nothing down. The right comparison is the funding fee (financed into the loan or paid in cash) plus the monthly payment, set against a conventional quote with 5% down and PMI. Sometimes VA wins clearly. Sometimes a larger down payment on a conventional loan narrows the gap.
- Get your Certificate of Eligibility, through the VA’s COE request page or through me.
- Confirm your funding fee status and any disability exemption.
- Request VA and conventional quotes side by side.
- Compare cash to close, monthly payment, and total cost over the years you expect to stay.
The mistake runs in two directions. Some buyers assume VA is always cheaper without checking, and others skip it because the funding fee sounds like a penalty. Neither is a comparison. Measure the funding fee plus the monthly payment against the conventional alternative.
4. Consider FHA When Credit History Is Thin or Recently Rebuilt
Many physicians have excellent income prospects and a thin credit file. An international medical graduate who recently moved to Henrico may have little US credit depth, and a doctor coming out of a rough financial stretch in training may have recent marks on their report. FHA financing is built with more flexibility for these profiles, with a lower minimum down payment and more forgiving credit guidelines than many conventional options.
The cost is FHA mortgage insurance, which has an upfront premium plus an annual premium built into the monthly payment. How long the annual premium lasts depends on your down payment and loan term. As of 2026, with a small down payment it can last for the life of the loan, which is why FHA is often a starting point rather than a permanent home. The current figures are on HUD’s FHA loan page.
Take an illustration: an international medical graduate with a signed contract, a small down payment, and only a couple of years of US credit history. A conventional loan might price poorly or not approve at all, while FHA may fit. Once the credit file deepens, a refinance could move the loan to conventional.
- Get an FHA quote next to a conventional quote on the same price and down payment.
- Review the upfront premium and annual premium on each.
- Ask exactly how long the annual premium would remain.
- Ask what credit improvements would make a later refinance worthwhile.
The mistake is choosing FHA out of habit. If your credit is strong, conventional with PMI often prices better, and its insurance can be removed. Measure the monthly payment including annual mortgage insurance premium against the conventional quote, not against a guess.
5. Get a Soft-Pull Pre-Approval Before Your Contract Start Date
Pre-approval is where doctors often lose time and credit points. If you shop several institutions, each can run a hard inquiry, and the habit of waiting until the start date leaves little room to compare. A soft credit pull mortgage review lets you learn your price range and compare programs without that damage. I offer this through the NoTouch Credit Pull, and as a soft pull mortgage broker I can compare many wholesale options at once instead of making you apply one by one.
Suppose you are a fellow in your final months of training. You have a signed attending contract and want to know your budget before you start looking at homes near West Broad Village. Under current Fannie Mae guidelines, a future-start contract can be usable under certain conditions, but the conditions matter, so confirm them with your broker for your situation.
- Request the NoTouch Credit Pull from me.
- Provide your signed contract, recent pay information, and student loan statements.
- Ask what conditions apply to income that has not started yet, such as verification of employment before closing.
- Review the price range against each program in this article.
The mistake is waiting until your start date, or letting several institutions each run a hard pull while you compare. Compare first, and pull credit only once you commit. What to measure is the number of hard inquiries, which should be zero during the shopping stage, and the pre-approved price range you walk away with. A no hard inquiry mortgage pre approval gives you the second number without costing you the first.
6. Buy Now, Then Refinance as Attending Income Rises
A first mortgage does not have to be your last. Many doctors pick the program that fits today’s finances, such as a small down payment with PMI, then plan a refinance once income, equity, and market rates improve. This takes the pressure off finding the perfect loan at the moment you have the least cash and the most debt.
Imagine you buy with 5% down in your first year as an attending. A few years later, income is higher and the home has gained value. You refinance to a loan that no longer needs mortgage insurance. Alternatively, you use a cash-out refinance, which we can structure up to 90% of the home’s value, to fund a kitchen renovation. If improvements are already planned at purchase, a renovation loan is worth asking about up front.
Whether any refinance is worth it comes down to break-even. For example, if closing costs are $5,000 and the new payment saves $150 per month, the break-even is about 33 months. If you expect to stay longer than that, it may make sense. If a move is likely sooner, it will not.
- Set a calendar check, perhaps twice a year, on home value, current rates, and PMI status.
- Before any refinance, ask for a written break-even estimate.
- Compare the remaining term on your current loan to the new one.
- If renovations are planned, price a renovation loan or cash-out option against paying cash.
The common mistake is refinancing for a small rate drop without counting closing costs, or without noticing that a fresh 30-year term resets your clock. Measure break-even in months, and the total interest difference over the years you realistically expect to stay.
Where to Start When You Are Weighing These Options
If I had to rank the actions, I would start with documenting your student loans, because that decides what you can qualify for under every program. Second, run a soft-pull pre-approval so you can see real numbers without a credit hit. Third, choose the program that fits the quote in front of you, whether that is conventional, VA, or FHA, rather than the one with the best reputation. Fourth, plan your refinance, because it is easier to make a good decision about it when you already have a calendar and a break-even number.
Ready to experience stress-free mortgage approval with no credit hit and access to hundreds of wholesale options at once? Get your free mortgage consultation today and discover why Glen Allen families trust Duane Buziak at Glen Allen Mortgage by Duane Buziak for personalized guidance and the fastest close times in the area.
