Illinois-based, The Federal Savings Bank operates a specialty mortgage program for physician homeowners. It’s designed to meet the unique needs of doctors who may have accumulated significant debt to enter the healthcare profession.
The Federal Savings can help doctors buy their dream home early in their career path.
About The Federal Savings Bank
Centrally headquartered in Illinois, The Federal Savings Bank, is one of the nation’s largest home lenders. It provides adjustable rate mortgages (ARMs), conventional loans, VA loans, FHA (first-time homebuyer) loans, construction loans, and mortgage refinancing.
The Federal Savings is also known for its physician mortgages, offering medical professionals more flexible financing options in their path toward homeownership. Physician loans are not sold as a specific mortgage product and you won’t find them advertised on the website. However, the bank is known to provide special underwriting for qualified medical professionals, offering loan terms similar to other traditional physician loan products.
Unlike other banks offering physician loans, The Federal Savings Banks is federally chartered and licensed to operate nationwide. This means it can originate and close home loans in all 50 states. Customers can speak with a loan officer at either of The Federal Savings Bank’s two (2) branches in the Chicago area.
The Federal Savings Bank also operates customer support centers all around the country. You’ll find locations in 17 states, including five (5) in New York and three (3) in Virginia.
Beyond The Federal Savings’ mortgage products, the bank’s primary focus, it also offers traditional consumer banking services such as checking accounts, savings accounts, certificates of deposit (CDs), money market accounts (MMAs), and mobile (app) banking. Discover The Best Lenders 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!
The Federal Savings Bank Physician Loan: Fast Facts
Here’s a quick run-down of how The Federal Savings Bank mortgage loans work for medical professionals.
- Qualifying Professions: Medical doctors, optometrists, dentists, podiatrists, or veterinarians. Residents or fellows herein are eligible.
- Eligible Property: Owner-occupied primary residence or a 1-2 unit residential property (i.e. condo, townhouse).
- Loan Amounts: Up to $2 million.
- Loan Types: Adjustable-rate mortgage (ARM), conventional, FHA, VA, HECM (a home equity conversion mortgage, commonly referred to as reverse mortgage), existing mortgage refinance.
- Student Loan Considerations: Payments on deferment for 12+ months are not included in the borrower’s debt-to-income (DTI) ratio. Otherwise, the maximum DTI ratio is 50%.
The Federal Savings Bank Physician Loan: Qualifications
Here’s an overview of the eligibility requirements to qualify for a physician loan through The Federal Savings Bank.
- Degrees: MD, DO, DDS, DMD, Resident, Fellows, DVM, DPM
- Employment Contract: In lieu of full-time employment, borrowers can qualify for a mortgage with a full-time employment contract if the loan closes within 90 days before the start of a new job.
- States: All 50 states*.
- Credit Score: 680 minimum FICO score
- Down Payment: 0% down mortgage options for home loans up to $1 million
- Private Mortgage Insurance (PMI): Required for mortgages (non-VA) with a down payment of less than 20%.**
*Many reviews claim The Federal Savings Bank offers mortgage products in only 32 states, however, The Federal Savings Bank states on its website that it finances home loans in every state. Unclear if physician loans are available in all 50 states.
**Whether PMI is specifically required for physician loans is unknown. Over the course of our article research, our editorial team contacted The Federal Savings Bank to request additional information. To date, we have not yet received a reply. When and if we do receive clarification, this article will be updated.
How to Apply
Borrowers can begin the application process by applying online, by phone, visiting a branch location, or connecting directly with a loan officer. You can find a representative near you in the online portal.
Online
The online mortgage application process is not recommended at this time. It took our editorial team six (6) attempts to submit our initial application. The network and website overall are glitchy and subject to frequent crashes, slow loads, and an unusable search bar.
If you do fill out the online mortgage form, you are asked to provide your name and basic contact information, along with your credit score range, zip code, total loan amount, and whether or not you are seeking a VA home loan. After submission, a mortgage banker will follow up regarding your application.
Phone
A phone application may be a more reliable method at this time. The Federal Savings Bank has an automated phone menu for callers who want to apply for a home mortgage or reverse mortgage.
- Call 1 (877) 788-3520
- Select “2” to discuss a home mortgage or reverse mortgage
- Select “3” to discuss a construction loan
Regardless of how you apply, you will need to provide documentation to show your residency status (driver’s license), financial situation, and medical degree. You will also need to agree to a credit check (hard pull) as any loan granted is contingent on employment in a qualifying medical profession and credit approval.
The Federal Savings Bank Physician Loan: Alternatives
In addition to The Federal Savings Bank, many other credit unions and banks offer special mortgages and refinancing options for physicians and other qualifying medical professionals. They may offer particular assistance for buying a first home, cabin or secondary dwelling, or rental property.
Other financial institutions with loan programs for you to consider include:
Evolve Bank & Trust
Arkansas-based Evolve Bank & Trust offers a generous physician loan program with much more lenient guidelines than The Federal Savings Bank.
Many more medical professions qualify for the bank’s physician mortgage program, including osteopathic doctors, optometrists, pharmacists, podiatrists, chiropractors, physician assistants, nurse anesthetists, nurse practitioners, and clinical nurse specialists.
Evolve’s financing terms are quite generous. Borrowers can receive 100% financing for up to $1 million with no PMI requirements. Additionally, a mortgage may be used to fund a much broader range of properties than what The Federal Savings Bank allows. This includes new construction, condominiums, HOA properties, or multi-family dwellings.
Flagstar Bank
Flagstar Bank offers a similar physician loan program, but its list of qualifying professions is even more generous than Evolve Bank – it’s perhaps the most comprehensive you’ll find. They accept a wide range of medical and non-medical degrees, including ATP pilots, attorneys, and CPAs. Additionally, registered nurses (RN degree) are eligible for a Flagstar medical loan.
Borrowers with excellent credit scores can borrow up to $1 million with no down payment required. And for added flexibility, Flagstar Bank will work with H-1B visa and Green Card holders.
The program is limited to early-career professionals with 10 years or fewer of working experience (in their qualifying career field), and it offers only ARM financing options.
BMO Bank
Formerly BMO Harris Bank, BMO Bank offers specialty medical loans for doctors and dentists. Borrowers within 10 years of starting their career may qualify for 100% financing for up to $1 million, but more advanced-stage professionals will usually need a down payment of at least 10%.
BMO will finance up to $2 million for its physician logan program and it approves DTI ratios of up to 45%. Additionally, loans may be used to finance or purchase any single-family or two-family housing unit as long as it’s the borrower’s primary residence.
While many banks only offer financing in select states, BMO offers physician loan financing in all states except New York.
Pros and Cons
Here are some of the pros and cons to consider with using The Federal Savings Bank as your mortgage lender for a physician loan.
Pros
- No down payment loan options.
- Ability to purchase a new home before starting your new job: within 90 days if you have an employment contract.
- High borrowing limit; able to finance real estate up to $2 million.
- Open to residents and fellows in eligible medical fields.
Cons
- Narrow range of qualifying medical professionals, which excludes physician’s assistants, nurse practitioners, nurse anesthetists, and osteopaths — fields commonly included in other physician loan programs.
- Website is challenging to navigate. Has limited information and is prone to crashes and glitches, rendering tools like contact forms and mortgage calculators
Frequently Asked Questions
Here are some of the most common FAQs readers have about The Federal Savings Bank and physician loan products.
What Credit Score Do You Need for a Physician Loan?
A credit score of 680 is generally required to obtain a physician mortgage, however, based on the borrower’s credit profile and financial needs The Federal Savings Bank can make an exception for good-risk borrowers.
The Federal Savings Bank, and banks in general, are willing to be more lenient with physicians. This borrower group may have a high debt-to-income (DTI) ratio, but as a whole doctors have very low loan default rates and high lifetime earning potential.
Is The Federal Savings Bank a Legitimate Lender?
Yes, The Federal Savings Bank is a legitimate lender that’s part of the Nationwide Multistate Licensing System & Registry (NMLS) with registry #411500.
Among Illinois-based financial institutions, The Federal Savings Bank is the 49th largest out of more than 560 in the state. The bank manages over $1 billion in assets for over 4,600 customers.
Do Physician Loans Have Higher Interest Rates?
It can vary. Most industry experts and physicians have found that physician loan interest rates are the same as other conventional rates or higher.
Oftentimes, physicians will have slightly higher interest rates as they are generally borrowing higher amounts with lower down payments or even no down payments and they may be getting other special considerations such as no PMI requirement. In this instance, however, a physician borrower would likely refinance their mortgage when able to obtain more favorable terms.
Is it Easier for Doctors to Get Loans?
In many instances, yes. Newer doctors often have thin credit profiles or substantial student loan debt, even though this is an overall good-risk borrower group. This is why lenders are willing to use different underwriting criteria for doctors, putting more emphasis on monthly payments and future earnings.
New doctors are among the very few consumers who can get a mortgage loan before they have a job — as long as they have a signed offer of employment.
