How To Buy A Home In Massachusetts Using the Doctor Loan Program

If you are a medical doctor, medical resident, or dentist you may qualify for a doctor loan program to buy a home in Massachusetts.

Using a doctor loan program can bring some substantial benefits that home buyers in other professions don’t have access to. There are also some draw backs to these programs, which often result in doctors using a conventional loan program instead.

Benefits of Using a Doctor Loan Program

Most doctor loan programs will not count your student loans against your debt-to-income ratio with proof the student loans are in deferment/forbearance for at least 12 months after closing on your home.

With a doctor loan program you can put a low down payment of 5%-10% down, and some programs allow as little as 3%.

The guidelines also allow “projected income” if the applicant is starting within 60 days of closing with a fully executed non-contingent contract. This is very useful for doctors who are about to get a substantial pay increase.

Some doctor loan programs do not require the borrower to pay PMI with their monthly mortgage payment.

Drawbacks of Using a Doctor Loan Program

The doctor loan programs can some times have higher interest rates, or only have adjustable rate options. Because the program is making an exception for student loans, or using projected income, the loan is considere more risky.

Doctor loan programs have higher credit score requirements. If you are a doctor, but have a low credit score then you cannot qualify for the special exceptions.

These programs are for use only on primary residences. So if you are looking to buy a 2nd home or investment property you cannot use the program. Some programs allow you to buy a 2-unit property as long as you will occupy one of the units.

Doctor programs often require you to show reserves in a bank account in excess of your down payment money. This is not usually the case on a conventional loan. The reserves can be in a liquid account, or a retirement account, but if you don’t have any reserves the doctor loan program might not work for you.

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Make sure you ask your lender about the doctor loan programs they have available. Many banks do not have these programs and will push you to use an FHA loan, so be sure to find a lender that has options for you.

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