Physician Home Loans in Phoenix & Scottsdale: 0% Down Guide

Yes. Eligible doctors and medical professionals buying a home in Phoenix or Scottsdale, Arizona may qualify for a physician mortgage with up to 100% financing, no monthly private mortgage insurance (PMI), and loan amounts up to $2 million.

Physician home loans are designed around financial situations that are common among medical professionals: high student loan balances, limited savings after medical school or residency, relocation for a new position, or having a signed employment contract but not yet receiving a paycheck.

If you're a doctor or medical professional buying a home in Phoenix, Scottsdale, Paradise Valley or elsewhere in Maricopa County, a physician mortgage may give you another option besides making a large conventional down payment.

What Is a Physician Mortgage Loan?

A physician mortgage, sometimes called a doctor loan or medical professional mortgage, is a home loan designed specifically for qualifying medical professionals.

Eligible borrowers may receive benefits that aren't typically available with traditional mortgage financing, including:

• Up to 100% financing

• Loan amounts up to $2 million

• No monthly PMI

• Minimum 680 FICO

• Ability to qualify with an eligible future employment offer letter

• Certain deferred student loans may be excluded from DTI

• Gift funds and eligible retirement assets may help satisfy reserve requirements

All financing is subject to complete underwriting approval and applicable program requirements.

Can Doctors Buy a Home With 0% Down in Phoenix or Scottsdale?

Yes, eligible medical professionals may qualify for up to 100% financing on a primary residence in Phoenix, Scottsdale and surrounding Arizona communities.

This can be especially valuable for doctors who have substantial income or future earning potential but don't want to drain their savings to make a large down payment.

Remember that 0% down doesn't necessarily mean $0 due at closing. Closing costs, prepaid taxes, homeowners insurance and other expenses may still be required unless they're covered through an allowable credit or other eligible source.

All financing is subject to complete underwriting approval and applicable program requirements.

What Would 100% Physician Financing Look Like on a $1 Million Scottsdale Home?

If you are looking at a $1,000,000 purchase price in Scottsdale, a physician loan could allow for a $0 down payment, resulting in a $1,000,000 loan amount (100% LTV) with no monthly PMI.

The borrower would still need to qualify based on credit, income, employment, assets, debt-to-income ratio and all applicable underwriting requirements. Closing costs and prepaid expenses may also be required. This is one reason physicians shouldn't automatically assume they need $100,000 or $200,000 saved for a down payment before looking at Scottsdale homes.

Who Is Eligible for a Physician Home Loan?

At least one borrower must hold an eligible medical degree. Eligible medical professionals can include:

• MD — Doctor of Medicine

• DO — Doctor of Osteopathic Medicine

• DDS — Doctor of Dental Surgery

• DMD — Doctor of Dental Medicine

• PharmD — Doctor of Pharmacy

• VMD or DVM — Doctor of Veterinary Medicine

• DPM — Doctor of Podiatric Medicine

• Certain CRNAs with a DNP or DNAP

Eligibility doesn't automatically mean loan approval. Your complete financial and employment profile must still satisfy underwriting requirements.

I'm Relocating to Work at Mayo Clinic in Phoenix. Can I Buy Before I Start My Job?

Potentially, yes. An eligible physician may be able to qualify using a fully executed employment offer letter before beginning the new position.

For eligible W-2 medical professionals, the employment start date may be as far as 150 days after the Note date, subject to program requirements. For eligible 1099 or contract medical professionals, the permitted timeframe is generally shorter, with employment beginning within 60 days of the Note date.

This can be particularly useful for doctors relocating to the Valley for employment with organizations such as Mayo Clinic, HonorHealth, Banner Health or other Phoenix-area medical providers. Instead of waiting until you've started your new job and accumulated pay stubs, you may be able to explore homeownership before your employment begins.

Can Medical School Student Loans Be Excluded From My DTI?

Qualifying deferred student loans may be excluded from the debt-to-income ratio under this physician mortgage program.

This is a significant distinction for some medical professionals. A doctor may have strong income and excellent long-term earning potential while simultaneously carrying a substantial medical-school loan balance. Under many mortgage programs, student loan obligations can affect the borrower's debt-to-income ratio and purchasing power. This physician mortgage provides different treatment for certain deferred student loans, subject to program requirements.

What Credit Score Do I Need for a Physician Mortgage in Arizona?

The minimum credit score for this physician mortgage program is 680 FICO. The program also generally requires at least a 24-month credit history with a qualifying tradeline.

A 680 score doesn't guarantee approval. Credit history, income, employment, assets, debts, loan amount and property eligibility are all considered during underwriting.

Can a Physician Mortgage Really Have No PMI With 0% Down?

Yes. Eligible borrowers can receive up to 100% financing without monthly private mortgage insurance.

This is one of the primary differences between this physician mortgage and many low-down-payment conventional mortgage options. Private mortgage insurance can add another expense to a monthly housing payment when a conventional borrower puts less than 20% down. With this physician mortgage, eligible borrowers don't have that monthly PMI expense—even with qualifying 100% financing.

How Much Can a Physician Borrow?

This physician mortgage provides financing up to $2 million, subject to loan-to-value limits and underwriting requirements. Maximum debt-to-income ratios depend upon the financing structure.

For financing between 90.01% and 95% LTV, the maximum DTI may be as high as 50%. For financing above 95% LTV, maximum DTI is generally 45%. Certain ARM and 15-year fixed-rate transactions also have a 45% maximum DTI.

Rather than trying to calculate your qualification from a DTI percentage alone, I recommend having your complete financial profile reviewed.

Do I Need Cash Reserves?

It depends on the loan amount and LTV. For financing at 95% LTV or below, loans up to $1.5 million may require no reserves, while loans above $1.5 million through $2 million may require 3 months of reserves.

For financing above 95% LTV, loans up to $1.5 million generally require 3 months of reserves, while loans above $1.5 million through $2 million generally require 6 months of reserves. Gift funds and 100% of eligible retirement accounts may be considered toward reserve requirements, subject to program guidelines.

What Types of Homes Can Doctors Purchase?

Eligible properties can include:

• One-unit single-family residences

• Warrantable condominiums

• Planned Unit Developments (PUDs)

• Modular homes

• Eligible properties with up to 40 acres

The property must satisfy applicable program and underwriting requirements.

Can I Use a Physician Loan to Buy a Scottsdale Condo?

Potentially, yes. Warrantable condominiums are eligible under this physician mortgage program.

The individual borrower must qualify, and the condominium itself must meet applicable eligibility requirements. If you're considering a Scottsdale or Phoenix condo, I recommend reviewing the condominium project early in the process rather than waiting until you're deep into escrow.

Are Physician Loans Only for First-Time Homebuyers?

No. You don't have to be a first-time homebuyer to use a physician mortgage. Both newer and established eligible medical professionals may qualify.

The better question is whether a physician mortgage provides an advantage for your particular financial situation compared with conventional or other available financing.

Is a Physician Mortgage Better Than a Conventional Loan?

Neither option is automatically better. A physician mortgage may be particularly attractive when you want to preserve cash, have qualifying deferred student loans, are beginning a new medical position, or want to avoid monthly PMI with a small or zero down payment.

Conventional financing may be more attractive in other situations. I believe physicians should compare both options rather than assuming that a physician mortgage is automatically the best loan simply because they're a doctor. The right comparison should consider the interest rate, APR, down payment, closing costs, monthly payment, mortgage insurance, cash remaining after closing and long-term financial objectives.

When Should I Get Pre-Approved?

Before you begin seriously touring homes. This is especially important if you're relocating to Scottsdale or Phoenix and will be using a future employment contract to qualify.

Getting your financing reviewed early can help establish:

• Whether your medical degree is eligible

• Whether your employment offer meets program requirements

• How your student loans will be treated

• Your potential maximum purchase price

• How much cash you may need at closing

• Whether 100%, 95% or another financing structure makes sense

• Which properties fit the loan requirements

It also gives your Arizona real estate agent a clearer price range when beginning the home search.