Best Physician Mortgage Loans in Delaware

Because physicians have earning potential that outpaces the general public, many financial institutions offer special programming to help professionals, like yourself, pursue homeownership through physician mortgage loans in Delaware.

There are more than 3,300 practicing physicians who have made Delaware their home and it’s a great place to put down roots due to its proximity to the Tri-State Area’s prestigious hospitals, universities, and residency programs.

Delaware offers its 1,003,300 residents more than a tax-free haven. In addition to beaches, national parks, and booming cities offer a variety of scenery to Delaware residents.

If you’re ready to begin the home-buying process, we recommend starting your research with the 9 best physician mortgage loans in Delaware.

9 Best Delaware Physician Home Loan Lenders

Here are the top physician mortgage loan lenders in DE:

1. BMO Bank
2. Bank of America
3. Citizens Bank
4. Evolve Bank & Trust
5. Flagstar Bank
6. Fulton Mortgage Company
7. Huntington Bank
8. TD Bank
9. U.S. Bank

1. BMO Bank

• BBB Grade: A+
• JD Power Score: 805

BMO Bank extends its Physicians’ Mortgage Program to licensed medical professionals within the following designations:

• Medical Doctor (MD)
• Doctor of Osteopathic Medicine (DO)
• Doctor of Dental Surgery (DDS)
• Doctor of Dental Medicine (DMD)

Residents and fellows are also eligible. Loans may be used to purchase or rate/term refinance a 1-2 unit property, single-family home, townhouse, or condominium that will be used as a primary residence.

The program does not have an age limit, but doctors who have been practicing for more than 10 years will be limited to 90% financing regardless of the loan amount.

Early-career medical professionals can qualify for a 5% down payment on loans up to $1.5 million. The program has a maximum loan amount of $2 million with a 10% down payment.

All down payment options exclude private mortgage insurance (PMI), which can significantly reduce monthly mortgage payments.

BMO Bank doesn’t advertise how it calculates the debt-to-income (DTI) ratio, but it will make individual exceptions for borrowers with significant student loan debt using its flexible underwriting guidelines.

Borrowers can also qualify with a future-dated employment contract that begins within 90 days of closing the home. The employment contract must clearly specify a sufficient base salary and start date.

Opening a BMO checking account provides access to additional discounts, such as a $500 closing cost discount when borrowers enroll in AutoPay.

2. Bank of America

• BBB Grade: NR
• JD Power Score: 791

Bank of America’s physician mortgage loans are open to qualified borrowers with a 700 minimum credit score. The following medical professionals, including residents, are eligible:

• MD
• DO
• DDS
• DMD
• OD (Optometrist)
• DPM (Podiatrist)

Borrowers have several down payment options. Loans up to $850,000 require a 3% down payment and loans up to $1 million require a 5% down payment. Loans up to $1.5 million require a 10% down payment and loans up to $2 million require a 15% down payment.

While Bank of America doesn’t require PMI to qualify, it does require 4–6 months of cash reserves. Employment contracts may be used as proof of earning potential, but borrowers will be responsible for all debt obligations between closing and the start of their employment.

Loans may be used to purchase a new home or refinance an existing mortgage.

Bank of America offers special financing options for medical professionals looking to start a business or open a private practice.

3. Citizens Bank

• BBB Grade: B+
• JD Power Score: 804

Citizens Bank offers its physician mortgage loan program to doctors and dentists with an MD, DO, DDS, or DMD degree. Current residents and fellows are also eligible.

The program offers flexible down payment options, all of which exclude PMI. Borrowers may qualify for loans up to $850,000 with a 5% down payment, loans up to $1 million with a 10% down payment, or loans up to $1.5 million with a 15% down payment.

Student loans deferred for a year or more won’t be factored into DTI calculations. Borrowers on an income-driven repayment plan can use their monthly payment amount to qualify, which can make it easier for borrowers who have yet to reach their full income potential.

Loans may be used to purchase an existing home, build a new home, or refinance a primary residence the borrower already owns.

All standard fixed and adjustable-rate mortgage products are available.

4. Evolve Bank & Trust

• BBB Grade: B
• JD Power Score: N/A

Evolve Bank & Trust offers its Medical Professional Program to healthcare professionals within the first 10 years of their careers. Compared to the aforementioned mortgage lenders, Evolve Bank & Trust is far more inclusive.

It provides financing to the following medical professionals, including current residents and fellows:

• MD
• DO
• DDS
• DMD
• PA (Physician Assistant)
• NP (Nurse Practitioner)
• DVM (Veterinarian)
• CRNA (Nurse Anesthetist)
• DC (Chiropractor)
• OD
• DPM
• PharmD/RPH (Pharmacist)
• Clinical Nurse Specialists

Borrowers can apply for a no-cost fully underwritten pre-approval, so they know what to expect from the home-buying process. All down payment options exclude PMI requirements.

Borrowers may qualify for 100% financing on loans up to $1 million, which is generous compared to many other mortgage lenders. There are also low down payment options.

Borrowers may put down 5% on loans up to $1.25 million, 10% on loans up to $1.5 million, or 15% on loans up to $2 million. In some situations, the program may exceed $2 million for qualified borrowers.

The program requires minimum cash reserves, but borrowers can use gift funds or a non-occupant co-signer to qualify, if necessary. Underwriters will use flexible DTI calculations to make it easier for borrowers with significant student loan debt to qualify.

Discounts on closing costs may be available.

Loans may be used to purchase a 1-4 unit property, single-family home, or condominium. Construction loans are also available.

5. Flagstar Bank

• BBB Grade: NR
• JD Power Score: 781

Flagstar Bank goes a step further than Evolve Bank & Trust’s Medical Professional Loan Program in terms of inclusivity because it extends its financing to borrowers outside the medical profession.

Flagstar Bank’s Professional Loan loan program is open to the following high-income professionals:

• Medical Resident (Educational License)
• Medical Doctor (MD)
• Doctor of Dental Surgery (DDS)
• Doctor of Dental Medicine (DMD)
• Doctor of Optometry (OD)
• Doctor of Ophthalmology (MD)
• Doctor of Pharmacy (PharmD/RPH)
• Doctor of Podiatric Medicine (DPM)
• Doctor of Osteopathy (DO)
• Physician Assistant (PA)
• Registered Nurse (RN)
• Nurse Anesthetist (CRNA)
• Nurse Practitioner (NP)
• Clinical Nurse Specialist
• ATP Pilot
• Certified Public Accountant (CPA)
• Attorney (JD)
• Veterinarian (DVM)

All borrowers must be within the first ten years of their careers to be eligible.

The program will extend up to $1 million without a down payment to borrowers with a 720 minimum credit score, but there are low down payment options for loan amounts up to $1.5 million.

PMI isn’t required and borrowers may use interested party contributions to meet the down payment requirements.

It is, however, important to note that the Professional Loan Program only offers adjustable-rate mortgages. Borrowers may select an initial fixed rate for 60, 84, or 120 months.

After this period expires, the interest rate will reset to the current market rate at 6-month intervals.

Loans may be used to purchase or rate/term refinance a single-family home, condominium, or property in a planned unit development.

6. Fulton Mortgage Company

• BBB Grade: A+
• JD Power Score: N/A

Fulton Mortgage Company, a branch of Fulton Bank, offers physician loan financing of up to $3 million to physicians, dentists, pharmacists, and veterinarians.

Borrowers may qualify for 100% financing on loans up to $1.5 million, 95% financing on loans up to $2 million, or 90% financing on loans up to $3 million. All financing options exclude PMI.

Student loans deferred for a year or more won’t be factored into credit approval. The seller may pay up to 6% of the closing costs. Gift funds from immediate family members may also be used to reduce the upfront costs of homeownership.

Employment contracts set to begin within 90 days of closing will be accepted.

The lender may even offer refinancing options with lower loan to values.

The program offers 15 and 30-year fixed-rate mortgages and several adjustable-rate mortgage options.

7. Huntington Bank

• BBB Grade: A+
• JD Power Score: 821

Huntington Bank’s physician mortgage loans are open to medical doctors, dentists, and veterinarians with an MD, DO, DDS, DVM, or DMD degree.

In addition to a qualifying degree and active license, borrowers will be required to show sufficient income and cash reserves to qualify for a physician loan. An employment contract may be used for borrowers who haven’t started their jobs yet.

The minimum reserve requirements depend on the loan amount. Borrowers can secure 100% financing on loans up to $1 million, 95% financing on loans up to $1.25 million, or 90% financing on loans up to $2 million.

As with all physician loan programs, PMI is not required. Borrowers can even prepay their loan early without penalty to avoid accruing additional interest.

The required down payment and the maximum loan amount will be determined by the borrower’s credit profile.

8. TD Bank

• BBB Grade: A+
• JD Power Score: 828

TD Bank created its Medical Professional Loan Program for residents, fellows, practicing physicians, dentists, and oral surgeons within the first 10 years of their careers. Loans may be used to purchase or refinance a single-family residence, townhome, or condominium.

Properties in co-op buildings may be considered in select markets.

Borrowers can choose a fixed or adjustable-rate mortgage with any of the following down payment options:

• 0% down payment on loans up to $1 million
• 5% down payment on loans up to $1.5 million
• 01% down payment on loans up to $2 million

PMI isn’t required with any of the above down payment amounts. The lender also uses a flexible approach to calculating DTI, so borrowers aren’t disqualified from the program for having too much student loan debt.

Like other physician programs, borrowers may use an employment contract to qualify if they don’t have a sufficient employment history.

9. U.S. Bank

• BBB Grade: A-
• JD Power Score: 820

U.S. Bank’s physician mortgage program is limited to residents, fellows, medical doctors, and doctors of osteopathic medicine. The program has a maximum loan amount of $2.5 million, but the down payment requirements vary based on the total loan amount.

While there isn’t a no-money-down financing option, U.S. Bank’s physician loan is competitive with other lenders on the market. Borrowers may qualify for any of the following down payment options without PMI:

• 5% down payment on loans up to $1 million
• 10% down payment on loans up to $1.5 million
• 15% down payment on loans up to $2 million

Borrowers must have a 710 minimum credit score.

How Physician Mortgage Loans Work in Delaware

Banks, credit unions, and other mortgage lenders offer special financing options to qualified medical professionals because they are likely to bring more business to the institution as they develop in their specialty.

These unique financing options, often called doctor mortgage loans or physician mortgage loans, attract advanced degree holders and keep their banking with the organization for the life of the loan.

Physician mortgage loans in Delaware allow doctors and other healthcare professionals to leverage their high-earning potential while they are still early in their careers.

While physician loans aren’t standardized across the mortgage industry, there are a few common threads we can use to compare programs to each other.

More Lenient

Physician mortgage loans are more lenient than conventional mortgages in some respects.

• No PMI: First, physician mortgages never require private mortgage insurance. Private mortgage insurance is a fee charged by lenders to protect them if borrowers default on their loans. Physicians are statistically less likely to default on their loans due to their increased probability of student loan forgiveness, job security, and earning potential, so lenders don’t need to charge the extra fee to protect themselves.
• Employment History: Second, physician mortgage lenders are willing to work with borrowers who haven’t had the chance to build the employment history that conventional mortgages require. Upcoming residents and new doctors who have yet to start their new jobs can use an employment contract that begins within 90 days of closing.
• Down Payment Requirements: Third, physician mortgage loans have low down payment requirements, which make them much more accessible to medical professionals who haven’t been able to save up for a significant down payment. In many cases, physician loans will accept down payments as low as 0–5% depending on the loan amount. Physician loans are usually considered jumbo loans. Jumbo loans are any loan amount that exceeds the county loan limit set by the Federal Housing Financing Agency. The combination of low down payment requirements and generous loan limits allows physicians to get into their dream homes faster.
• Medical Student Loan Debt: Fourth, physician mortgage underwriters have an intimate understanding of how student loan debt acts as a barrier to securing a home loan. As such, they’re often willing to make individual exceptions for borrowers with substantial student loan debt. Every lender treats student loan debt differently, but deferred student loan payments are the most likely to be excluded from DTI calculations.

A Few Restrictions

With all that said, physician mortgage loans can be more restrictive than conventional mortgages in some ways.

For example, physician home loans are usually reserved for the purchase or refinance of an owner-occupied primary residence; investment properties are rarely eligible.

Similarly, physician mortgage lenders reserve the right to limit financing to specific kinds of properties. Generally, physician loan financing options can be used for warrantable condominiums, detached single-family homes, and townhouses.

We recommend contacting a loan officer for more information about the specific physician mortgage loan programs you’re interested in.

Pros and Cons

Choosing a loan program is a major financial decision and it’s easy to get stuck considering all your options. Pros and cons are a great way to look at how the specific elements of physician loan programs will fit your financial situation.

We’ve prepared some notable pros and cons to help you make an informed choice about physician mortgage loans in Delaware.

Pros

• Open to medical residents: Most doctor mortgage loans are open to licensed borrowers right out of medical school.
• No-money-down loan options: Some physician mortgage loan programs offer 100% financing. Other physician loan programs offer competitive low down payment options as low as 5–10%.
• Kind to student loan debt: Physician loan underwriters are typically lenient on student loan debt when calculating debt-to-income ratios. Some loan programs exclude it entirely while others use a fraction of the total loan balance.
• Doesn’t require private mortgage insurance: Doctor loans don’t require PMI. Waiving this requirement can save borrowers thousands of dollars over the loan term.
• Larger loan amounts: Physician loans aren’t conforming conventional loans, so borrowers have access to more generous loan amounts.
• Refinance: Physician mortgage loans can be used to rate/term or cash-out refinance a primary residence already owned by a qualifying healthcare professional.
• Lenient on income history: Because early-career medical professionals are unlikely to have a lengthy income history, it’s common for physician loan programs to accept employment contracts as proof of earning potential.
• Close up to 90 days before you start work: Employment contracts dated within 90 days of closing may be accepted. This flexibility allows borrowers to settle into their homes before starting their new jobs.

Cons

• No standard eligibility: Every physician lender has its own eligibility requirements. Some loan programs limit financing to medical doctors and dentists within the first 10 years of their careers, but other programs are more inclusive of later career professionals.
• Not for investment properties: Most doctor mortgage loans are not available for second homes, rentals, or investment properties due to the primary residence restriction.
• Large mortgage payment: Due to the generous loan amount and low down payment options, borrowers are likely to have a large monthly payment weighing down their budgets.
• Closing costs and cash reserves: Despite offering 100% financing options, physician mortgage loan programs still have a minimum cash reserve and closing cost requirements.
• Higher interest rate: Doctor loans may have a slightly higher interest rate than conventional mortgages of the same amount. Some physician mortgages are adjustable-rate mortgages, which means the interest rate will fluctuate.

Frequently Asked Questions

How much money can doctors borrow with a physician mortgage?

The maximum amount doctors can borrow with a physician mortgage depends on credit score, income, and location, but most physician mortgages have a maximum loan amount between $750,000 and $1.5 million.

Shopping around can help you find physician mortgage loans that meet your needs. Some loan programs will extend as much as $2 million with low down payment options.

Do you need a down payment for a mortgage loan?

You don’t always need a down payment for a mortgage loan if you know where to look. Conventional loans require a down payment between 3–20% of the home’s purchase price. FHA loans typically require 3.5%. Down payment assistance programs can offset this cost.

USDA and VA loans offer no-money-down financing options to qualified borrowers. Physician mortgage loans also provide competitive low or no down payment options to high-income earning professionals.

What is the loan-to-value for a physician mortgage?

The loan-to-value for a physician mortgage depends on that specific lender and the borrower’s credit score. Borrowers with a high credit score are more likely to receive the maximum loan to value. Physician loan programs generally provide 80–100% financing.

Do doctors get better mortgage rates?

No, doctors don’t automatically get better mortgage rates, but their high income and lower rate of default make them a lower risk to lenders. Physician mortgage loans offer competitive financing options to medical professionals that meet their credit score, DTI, and employment requirements.

We recommend talking to a loan officer to find out more about the current interest rates you can qualify for.

How are student loan payments factored into DTI for physician mortgages?

Student loan payments aren’t always factored into DTI for physician mortgages. Student loan payments deferred for at least one year are most likely to be excluded, but it’s not the only option.

Borrowers on an income-driven repayment plan can sometimes use their monthly payment amount to calculate DTI. Other physician mortgage programs may use 2% of the total loan balance.

Who is a Physician Loan in Delaware Best For?

Are you stuck in analysis paralysis trying to decide if a physician mortgage loan in Delaware is the right choice for you? It happens.

Consider the below examples of borrowers who may be just like you. Relating to other people can help you get out of this rut and onto the home-buying process.

1. Primary care physicians comparing their rate options

Whether you own a private practice or you are working for a larger organization, you likely have more than one financial goal at any one time. Shopping around and comparing rate options can help you find the best interest rate available to you.

Qualified borrowers with excellent credit can qualify for competitive interest rates through physician mortgage programs. In some cases, it may make sense to choose an adjustable-rate mortgage product.

Adjustable-rate mortgages often have lower introductory interest rates than fixed-rate mortgages, but this rate will eventually reset to the market rate when the introductory period expires.

2. Veterinarians on an income-driven repayment plan

Student loan debt can feel like a shackle around your ankle, even if you’ve achieved many of your career aspirations of becoming a veterinarian. An income-driven repayment plan allows people with high student loan debt to make payments without monopolizing their entire salary.

Income-driven repayment plans can also work to borrowers’ benefit when they apply for a physician mortgage loan. Many of the best physician mortgage loans in Delaware will use your monthly payment amount to calculate your monthly DTI, which can make it much easier to qualify if you have a significant student loan balance.

3. Medical residents starting a new job

Medical residents often have to relocate to continue their training in their given specialty. Being fresh out of medical school doesn’t do these individuals any favors in the income history department.

Finishing school and moving on to a new job in a new city is enough of a transition; buying a home can help them put down stable roots and start building equity. Physician loan programs will accept future-dated employment contracts in lieu of employment history.

In general, physician mortgage loan programs will need to see proof that employment will begin within 90 days of closing. Borrowers will often need to show a savings account with sufficient cash reserves to cover all debt obligations between closing and the beginning of employment.

4. New doctors interested in refinancing

If you already own your home and you’ve recently become a doctor, refinancing can give you access to lower mortgage payments, a better interest rate, or a home equity line of credit you can leverage for other goals in your life.

Physician mortgage loans allow qualified medical professionals to refinance an owner-occupied primary residence.

Rate/term refinances allow homeowners to begin a new loan for the remaining balance of their previous mortgage. If you’ve been making payments for years already, refinancing can lower your monthly payment by spreading the remaining balance across a new loan term of up to 30 years.

Cash-out refinances allow homeowners to take out their existing home equity to pay down debt or make home improvements. Many cash-out refinances require a certain amount of money to go toward paying off debt, but borrowers can take a certain amount in cash with few restrictions.

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