Underwriting Simulator · May 2026
Physician Loan
Qualification Simulator
By Ziya Y. · 23 Years Banking & Mortgage · Updated May 2026
Physician loans break the normal rules — and that's the point. Student loans excluded from DTI. Offer letter accepted as income. 0% down with no PMI. This simulator runs the real math that physician loan lenders use.
Physician Loan vs Standard Conventional
| Feature | Physician Loan | Conventional |
|---|
| Min Down Payment | 0% (up to $1M) | 3-20% |
| PMI Required | Never | Yes if <20% down |
| Student Loans (DTI) | Excluded (if deferred) or IBR payment | 0.5-1% of balance/month |
| Income Proof | Offer letter / contract accepted | Must be currently employed |
| Max Loan | $1M-$2M (varies by lender) | $832,750 conforming |
| Min Credit Score | 680-700 (most lenders) | 620 |
| Rate vs Conventional | 0.25-0.75% higher typically | Baseline |
| Who Qualifies | MD, DO, DDS, DMD, PharmD, DVM, residents, fellows | Anyone |
🔍 Glass Box — Physician Loan Decision Logic
1. INCOME: Offer letter salary accepted as qualifying income
└─ Source: Fannie Mae Selling Guide B3-3.1-09 (future employment)
2. STUDENT LOAN DTI TREATMENT:
├─ Standard: 0.5-1% of balance = $1,400-2,800/mo on $280K
├─ Physician loan (deferred): $0 counted → save $1,400-2,800 in DTI
└─ Physician loan (IBR): Use actual IBR payment (often $200-400/mo)
3. PMI EXEMPTION: No PMI regardless of LTV
└─ Lender absorbs PMI risk based on physician income trajectory
4. MAX LOAN: Most programs $1M at 0% down, $1.5-2M at 5-10% down
5. APPROVAL: Physicians have historically low default rates → lenders price this in
The Student Loan Math
This is where physician loans create the biggest advantage. On $280,000 in student loans:
- Standard conventional: 1% rule = $2,800/month in DTI
- Physician loan (deferred): $0/month in DTI
- Physician loan (IBR): $200-400/month actual payment
On a $65,000 resident salary, that $2,800/month difference is the difference between DTI 85% (denied) and DTI 38% (approved). Physician loans exist because this math is otherwise impossible.
Frequently Asked Questions
Can I use a physician loan as a resident before starting residency?
Yes — this is one of the most powerful features. You can use your signed residency contract or offer letter as proof of income, even if you haven't started yet. Most programs allow closing up to 90 days before your start date. Some extend to 6 months.
Which specialties qualify for physician loans?
MD and DO degrees universally qualify. Most programs also include: DDS/DMD (dentists), PharmD (pharmacists), DVM (veterinarians), CRNA/NP (nurse practitioners/anesthetists), and podiatrists (DPM). Some lenders restrict to MD/DO only — always confirm before applying.
Are physician loan rates much higher than conventional?
Typically 0.25-0.75% higher than a comparable conventional loan. At current rates (~6.7%), expect 6.9-7.5% on a physician loan. The premium reflects the no-PMI benefit and student loan exclusion — for most borrowers, the math still strongly favors the physician loan vs PMI + student loan DTI penalty.
What if I'm moonlighting or have 1099 income during residency?
Moonlighting income is tricky. Most physician loan programs require 12-24 months of documented 1099/moonlighting income before it counts toward qualifying. Your residency contract income is straightforward — the moonlighting is bonus context, not primary qualifying income during residency.
Ask Zai About Your Situation
Residency start date, specialty, loan amount, student balance — Zai knows physician loan nuances.
🏦 Ask Zai Free →
📄 Resident Guide
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Not financial advice. Physician loan terms vary significantly by lender. Always get multiple quotes. Consult a licensed MLO experienced with physician loans. [email protected]
The part almost nobody publishes free
Prices and rates are widely reported. Whether a lender says yes is not. In the complete 2025 federal record, denial rates across the 100 largest FHA lenders ran from 1.8% to 78.7% — same programme, same year.
And it is not simply who applies where: standardizing on state, loan amount, income, debt-to-income and loan-to-value, applicant mix explains only a 2.7× range in expected outcomes.
CFPB HMDA 2025, computed by FinanceRateCalc. Covers the highest-volume lenders published per market, not all lenders. Historical observations, not predictions. CC BY 4.0, not independently reproduced.
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