Leaving medical school with a pile of debt may make you think you’ll never be able to afford to buy a home. But physician mortgage loans in Iowa may help you reach your goals.
This loan program allows doctors and other medical professionals to secure financing with no down payment and a high DTI because of student loans.
It’s not always the best idea because it’s easy to get in over your head. But here are 7 of Iowa’s best physician mortgage loans to consider if you’ve decided it’s a good program for you.
7 Best Iowa Physician Home Loan Lenders
Here are the top physician mortgage loan lenders in IA:
Discover The Best Lenders in Iowa Answer just a few questions about your career, where you're buying, and how much you want to borrow. Our service will then show you the exact programs you're eligible for from vetted physician loan specialists who will guide you through every step of the process – obligation-free!
1. BMO Bank
- BBB Grade: A+
- JD Power Score: 805
BMO Bank offers physician mortgage loans in Iowa. They open the program to new and established doctors, including residents and fellows.
The program is available to doctors within the first ten years of practicing. If you have over ten years in your practice and still need the program, you’ll need at least a 10% down payment.
To qualify for a BMO Bank physician loan, you must have the following down payment amounts:
- 5% on $1 million – $1.5 million
- 10% on $1.5 million – $2 million
The program is available to MDs, DOs, DDSs, and DMDs on any type of home, including single-family, condos, multi-unit properties, and townhomes.
2. Citizens Bank
- BBB Grade: A+
- JD Power Score: 818
Citizens Bank offers a physician loan program to new and self-employed doctors. There isn’t a 2-year employment history required for self-employed doctors, and like most physician loan lenders, they offer loans to doctors with an employment contract beginning within 90 days.
Doctors can apply for the program within the first ten years of their career and require up to a 10% down payment on loans up to $1 million.
The program is available to MDs, DOs, DDSs, and DMDs, and is available as a fixed or adjustable-rate loan.
3. Evolve Bank & Trust
- BBB Grade: A+
- JD Power Score: N/A
Evolve Bank & Trust offers a loan program to new doctors, fellows, and residents. They have low down payment requirements and flexible guidelines. However, if you purchase a multi-unit home with the program, you’ll need a larger down payment than normal.
Most doctors can qualify for a loan of up to $2 million on single-family condos and townhomes with a low down payment.
The program is open to doctors, including MDs, ODs, DDSs, DMDs, veterinarians, pharmacists, nurse practitioners, and clinical nurse specialists.
4. FNBO
- BBB Grade: A+
- JD Power Score: 847
First National Bank of Omaha offers a flexible mortgage program for doctors who don’t qualify for conventional financing.
Medical professionals can qualify for a mortgage with no down payment up to $850,000. If you must borrow more, you’ll need a larger down payment, but the underwriting guidelines are flexible, including no PMI requirements. However, you must have at least a 700 credit score to qualify.
The program is open to MDs, DOs, DVMs, DMDs, NPs, PAs, and CRNAs.
5. Huntington Bank
- BBB Grade: A+
- JD Power Score: 821
Huntington Bank offers a physician loan program in Iowa for purchase and refinance loans. The loans are available as fixed or adjustable-rate. To qualify, you must buy or refinance a primary residence. If you’re buying a home, you need the following down payments:
- 0% on up to $1 million
- 5% down on up to $1.25 million
- 10% down on up to $2 million
Huntington Bank also requires borrowers to have cash reserves to qualify for the loan. The amount you need depends on your loan amount. However, you can qualify for a loan with an employment contract if it begins within 90 days.
The program is open to MDs, DOs, DMDs, DVMs, and DDSs.
6. Regions Bank
- BBB Grade: B+
- JD Power Score: 697
Regions Bank offers a physician loan program to doctors just starting their careers and established doctors. You can apply for the loan up to 90 days before starting your position. The program is for primary residences only and required the following down payments:
- 0% on up to $750,000
- 5% on up to $1 million
The program is available to MDs, DOS, DMDS, and DDSs. Regions Bank doesn’t charge PMI on the loans.
7. US Bank
- BBB Grade: B+
- JD Power Score: 807
US Bank offers a physician loan program in Iowa but only for doctors, including residents and fellows. Unlike many other programs, they don’t extend the program to dentists.
To qualify, you must have the following down payment:
- 5% down on up to $1 million
- 10% down on up to $1.5 million
- 15% down on up to $2 million
The downside of using US Bank for your physician loan needs is the program is only open to MDs and DOs.
How a Physician Mortgage Loan Works in Iowa
Physician loans are loans for doctors and other medical professionals. They work around the traditional guidelines for conventional loans, including the 20% down payment and 43% debt-to-income ratio requirement.
Since the average doctor leaves medical school with debt between $200,000 and $215,000, getting approved for a mortgage is often difficult. Medical school graduates either don’t have the capital for a large down payment, or their student loan debt increases their credit ratio too much.
What Physician Mortgage Loans Are
To address these issues, physician loans offer no or low down payment options and either higher DTI allowances or don’t consider student loan debt in the equation.
There are rules to qualify for physician loans, of course. For example, some lenders only offer the program to certain types of doctors or during a certain period, such as the first ten years of your medical career.
Some lenders, however, offer loans to a wide range of medical professionals, including chiropractors, nurses, and pharmacists. It varies widely by lender.
Pros and Cons of Physician Mortgage Loans in Iowa
Any mortgage loan has pros and cons a borrower should weigh. This will help you determine which loan program is right for you.
Pros
- Low or no down payment options
- No PMI
- Flexible underwriting guidelines
- High loan limits
Cons
- Flexible guidelines make it easy to overspend
- Higher interest rates
- Specific guidelines, such as requiring you to have a bank account at the lender’s bank
Deciding if a Physician Mortgage Loan Is Right for You
Deciding if a physician mortgage loan is the best choice is a personal decision. You should consider the monthly payment, interest costs, and your plans. If you’re ready to settle down and have a solid career, you might consider a physician loan to start homeownership and building equity.
Keep in mind, however, that you’re committing to a large mortgage payment. So if you have student loan debt to pay off, consider how you’ll stay on top of that debt while handling a mortgage.
Also, consider if you’re okay with borrowing 90% to 100% of the home’s value. It takes longer to build equity when you have a high loan-to-value ratio. Consider if you’d rather wait and save for a larger down payment or jump into home ownership.
The key is to keep yourself from overspending. The flexible underwriting guidelines make it easy to accept a payment that might easily overwhelm you. Consider the property taxes, home insurance, and home maintenance costs when deciding if a physician mortgage is right for you.
Who Can Take Out a Physician Mortgage Loan
The most common physicians who benefit from a physician mortgage loan in Iowa include the following.
Physician With No Down Payment at Hand
If you have little money to put down but have a high enough income from your career as a medical professional, you may qualify for a doctor loan in Iowa.
Many lenders don’t require any money down, allowing you to buy a home much sooner than if you had to wait to have a mortgage payment of 20% or higher.
Physician With Large Student Loan Debt
If you left school with $200k+ in student loan debt, qualifying for a conventional mortgage could be impossible. Between the student loan debt, the new mortgage, and any other debt, you would likely exceed the 43% DTI threshold.
Physician loans often exclude student loan debt from your DTI, making qualifying for a mortgage loan much easier.
Dentist Looking To Optimize Leverage
Doctors and dentists can use physician mortgage loans to leverage their investments in real estate. The program is mostly for primary residences, but without needing a large down payment, you can buy a much larger (more expensive) house without much capital.
What You Need to Qualify for Physician Mortgage Loans
Physician loans have specific requirements borrowers must meet to qualify, including the following:
- Credit scores between 720 and 740, depending on the lender
- Proof of the proper degree as accepted by the program
- Proof of employment or an employment contract that begins within 90 days
- Adequate income to cover the mortgage payment and other existing debts
- Proof of assets or mortgage reserves as required by the program
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