Written By Caitlin See
Key Takeaways:
- An occupational therapist mortgage loan can provide low down payment options that don’t require the borrower to carry private mortgage insurance.
- Occupational therapists can benefit from relaxed OTD mortgage underwriting guidelines, such as more flexible income requirements and student debt treatment.
- OTD mortgage loans aren’t as readily available as other physician home loans, but some programs will evaluate professional eligibility on a case-by-case basis.
Many of the occupational therapists our team consults with have around $200,000 or more of student debt. Yet, the average OT salary is less than $90,000. When you consider this unbalanced burden coupled with the traditional requirement of saving for a 20% down payment, owning a home can quickly become a distant dream for many occupational therapists.
However, that might not be the case due to your degree. Some banks offer an OTD mortgage as part of their physician home loan program — sometimes referred to as a medical professional loan.
Here’s what you need to know about occupational therapist mortgage loans and where to find them.
What’s an occupational therapist mortgage loan?
Occupational therapy revolves around helping others overcome barriers, whether that be a physical, mental or social obstacle. It’s fitting that some banks are reworking their physician mortgage programs to include OTs in hopes of helping them push past the various underwriting barriers associated with conventional mortgage loans.
An occupational therapist mortgage loan can help OTs secure a mortgage early in their career. Benefits of an OTD mortgage include:
- The ability to purchase a home with little or no money down.
- No private mortgage insurance (PMI) requirement despite not providing a traditional down payment.
- Higher loan limits than a conventional home loan, which usually caps out at $647,200 (varies in high cost areas).
- Favorable treatment of OT student loan debt when calculating your debt-to-income ratio (DTI).
- Relaxed income documentation requirements that allow you to close up to three months before your start date.
These special home financing programs can be of great benefit, especially in today’s housing market.
However, here’s the not-so-good news: OTD mortgage loans are fairly limited. Most physician home loan programs cater to doctors and dentists. But that doesn’t mean you’re left out in the cold when looking for low down payment solutions.
3 Lenders offering an OTD mortgage
We’ve put together a list of potential OTD mortgages, along with loan officer contact information when applicable. Note that it can be challenging to find lenders that explicitly include occupational therapists in their professional mortgage program eligibility.
Therefore, if you come across a lender offering medical profession home loans, it might be worth reaching out to see if you qualify as an OT on a case-by-case basis.
1. First Merchants Bank (formerly Level One Bank)
First Merchants Bank provides a professional home loan program for healthcare providers that don’t typically qualify for other physician mortgage programs. But for now, you must live in Michigan, Ohio or Indiana to qualify.
Occupational therapists might be eligible for up to $350,000 in home financing with just 3% down and no PMI. Note you’ll need a minimum credit score of 680 and loan applications will be evaluated on a case-by-case basis for professional eligibility.
States available: IL, IN, MI, OH
2. Health Advantage Credit Union
Health Advantage Credit Union, based out of Michigan, offers a healthcare employee mortgage program to occupational therapists and other medical professionals who have been employed for a minimum of two years.
This mortgage program comes with no PMI. However, you’ll need to reach out to a loan officer to gain better insight into their program benefits and eligibility.
States available: MI
3. U.S. Bank
U.S. Bank’s physician mortgage program is specifically designed for medical doctors. But considering you have limited financing options as an OT, you might benefit from its general 80-10-10 mortgage program.
This alternative low down payment program allows you to only bring 10% to the table by securing two mortgages. The first will be 80% of the purchase price, and the second will be the remaining 10%. This type of “piggyback loan” also allows you to avoid PMI.
States available: AL, AK, AZ, CA, CO, ID, IL, MA, MT, MI, MN, MS, NE, NV, ND, NM, OK, OR, RI, SD, TX, UT, WA, WY, WI
Should you use an occupational therapist mortgage loan?
Depending on where you live and other eligibility requirements, an OTD mortgage might be the solution to buying a new home sooner than a conventional home buying timeline.
Low down payment options, no PMI and flexible underwriting guidelines can make it easier and more affordable to secure a mortgage. But your OTD degree isn’t automatically included in many physician home loan programs. So, you’ll need to contact lenders directly to see if you qualify.
That being said, you might have additional physician mortgage options if you happen to be married to a medical doctor, dentist, optometrist, veterinarian, pharmacist or another common eligible profession. In which case, you’ll want to explore our free physician mortgage resources that break down the various programs available to each profession and certain locations.
Use the form below to directly receive quotes for occupational therapist mortgage loans or search through some of the top physician mortgage lenders in each state.
