Perks of the job: Physicians qualify for special home loans

Being a physician comes with its share of perks, but younger docs may not realize that their medical degrees can make it easier to buy a home.

Physician loans are typically offered to doctors who have graduated from medical school in the past three years, according to an article from Realtor.com, which can make it easier to buy a home while paying off often-hefty student loan burdens.

“It costs a lot of money to attend medical school, which saddles these graduates with mountains of student loan debt,” Heather McRae, a senior loan officer at Chicago Financial Services, said. “This causes [doctors] to be unable to qualify to purchase or refinance using a traditional loan program.”

RELATED: Why young docs must be smart with their money

However, physician loans are not offered everywhere and are restricted to certain kinds of doctors, according to the article. Medical doctors, doctors of osteopathy, dentists and veterinarians typically qualify, but certain lenders may not extend the option to others, like podiatrists and optometrists. Other medical providers, like chiropractors or dieticians, are also generally excluded.

Physician loans also require a fairly high credit score, according to the article, typically 680 or above.

But for the typical, freshly graduated doctor, the loans offer a lot of flexibility if they’re interested in homeownership, according to the article. Physician loans typically require only a 10% down payment, and doctors can choose between fixed-rate or adjustable-rate loans, just like with other home loan options. 

Still, paying down student loans should be a top priority for young physicians, FierceHealthcare previously reported. A number of recent graduates have enrolled in the federal government’s loan forgiveness program, which forgives the remaining balance on student loans after the borrower pays for 120 consecutive months. Many doctors save upward of $130,000 under the program.