Key Takeaways:
- Doctors, dentists, optometrists, veterinarians and other high-earning professionals can benefit greatly from a physician mortgage loan in Alabama.
- Physician mortgage programs offer up to 100% financing with no private mortgage insurance requirement.
- Doctor loan options typically allow loan amounts up to $1 million or more while maintaining competitive interest rates.
Almost 5 million people live in Alabama, with over 12,600 of them actively practicing as MD or DO physicians. If you’re one of these physicians or starting your residency program, you might be eligible for an exclusive homeownership program that’s specifically designed for doctors, dentists and other high-salary, high-student-debt professions.
A physician mortgage loan in Alabama can open the door to 100% financing options and higher loan limits than a conventional mortgage. It also lets you buy a new home and settle down before starting your new position.
Let’s explore how you can benefit from a physician mortgage loan in Alabama.
How do Alabama physician mortgages work?
Until recently, physician home loans were limited to medical doctors and dentists. However, some physician loan programs now include chiropractors, podiatrists, pharmacists, ophthalmologists, veterinarians and more.
The main benefits of a physician mortgage loan in Alabama include:
- Optional down payment financing. Most physician mortgage programs offer up to 100% financing for qualifying borrowers. Therefore, you won’t have to spend years saving up for a large down payment or draining your existing savings to buy your next home.
- No private mortgage insurance (PMI). Conventional mortgages require you to carry PMI if you can’t provide a 20% down payment. But physician mortgage lenders don’t require PMI no matter your down payment amount. This holds true even if you choose a $0 down option.
- Special treatment of student loans. Physician mortgages are designed with your career trajectory in mind. So, a large student debt balance isn’t as big of a hurdle as it might be with a conventional mortgage. However, each lender factors student loan debt into their debt-to-income ratio differently.
- Higher loan limits. If you plan to purchase a home that costs more than the conventional loan limit (generally $647,200 but varies in more expensive real estate markets), then you might be able to find better interest rates with a physician mortgage loan in Alabama.
Additionally, new physicians, residents, fellows and interns can qualify for a physician mortgage loan before starting their new position. This perk varies by program, but most physician mortgage lenders require proof of an employment contract with a start date within 60 to 90 days of closing.
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7 Lenders to explore for a physician mortgage in Alabama
If you’re planning to purchase or refinance a home in 2023, here are the top physician mortgage loans in Alabama listed alphabetically. We’ve included ways to directly contact each program’s loan officer who specializes in physician mortgages.
1. Evolve Bank and Trust
Evolve Bank offers doctor mortgage loans for home purchases and refinancing for up to 100% financing with no PMI. Borrowers can put zero down for up to $1 million or 5% down for up to $1.5 million. It's important to note that this program only offers a 30-year fixed rate option.
If you are a medical resident, MD, DDS, DMD, OD, Doctor of Pharmacy, DPM, DO, RN, physician assistant, nurse practitioner, clinical nurse specialist, ATP pilot, CPA, attorney, or veterinarian, you could be eligible for this loan program. It's important to note that you must be 10 years or less from starting your career to be approved.
H-1B visas and/or green card holders are eligible with 25% down.
A credit score of 700 is needed to be approved for only 5% down. A credit score of 700 is needed to be approved for zero down.
1099 workers must supply documentation of at least two years of income.
2. First Horizon Bank
Alabama physicians with an MD, DO, OMS or DPM designation can access the physician mortgage program with First Horizon. If you're working toward a new employment contract, you can close up to 90 days before your start date.
Financing options include:
- 0% down for up to $1.5 million.
- 5% down for up to $2 million.
- 10% down for up to $2.5 million.
They also offer H-1B visa non-citizens loans and 100% financing.
Note that a minimum credit score of 670 is required. However, First Horizon doesn't cap financing based on how long you've been practicing. So, this program is great for physicians with more than 10 years of post-residency experience.
Related: First Horizon Physician Mortgage Loan Review
3. Flagstar Bank
Flagstar Bank's physician mortgage program offers the options of purchasing or refinancing a primary residence.
With the option of up to 100% financing with no required PMI, this is a potentially great fit for prospective home buyers.
Degrees that qualify for applying to this program include MD, DDS, DMD, OD, PharmD, DPM, DO, PA, RN, NP, CPA, DVM, clinical nurse specialists, attorneys and ATP pilots.
Related: Flagstar Bank Physician Mortgage Review
4. NEO Home Loans
Neo's Physician Home Loan program offers 0% down financing with no PMI to those who have an MD, DO, DMD, DDS, DPM or DVM. This program is for primary residence purchases. However, NEO Home Loans also offers second home and investment financing.
With NEO's physician home loan program's sole available rate option of a 30-year ARM, here are the available financing choices through this program:
- 0% down for up to $1 million
- 5% down for up to $1.25 million
- 10% down for up to $2 million
Eligible veterans are also welcome to apply, and are welcome to compare the benefits of using VA loans versus the physician home loans program. J1 visa holders are also eligible to apply.
5. Regions Bank
The Regions Bank physician mortgage loan is available to many in the healthcare field, as well as attorneys. Specifically, licensed attorneys, pharmacists, nurse anesthetists, nurse practitioners, physician assistants, veterinarians, chiropractors, optometrists, podiatrists, MDs, DOs, DMDs and DDSs in Alabama are eligible. Residents and fellows are also eligible.
There are certainly advantages to this program, including no PMI requirement, no cap on the loan amount you apply for, and the possibility of Regions Bank (with review) excluding some deferred student loan payments from your DTI ratio, making it easier to qualify for the mortgage amount you desire.
Financing options include:
- 30 and 15 year fixed-rate loans.
- 10, 7 and 5-year ARMs.
- Construction-to-permanent financing.
You can close up to 90 days before the listed start date on your employment contract or date of transferred employment.
Related: Regions Bank Physician Mortgage Review
6. Truist
Alabama physicians with an MD, DO, DPM, DDS or DMD can use the Truist doctor mortgage loan program to secure up to $1.5 million in home financing with no PMI. Licensed residents, fellows and interns in an MD, DO or DPM program have access to loan amounts up to $750,000 with no money down.
If you’re a practicing physician and it’s been less than 10 years since completing your training, you can choose from the following loan options:
- 0% down for up to $1 million.
- 5% down for up to $1.5 million.
- 10.01% down for up to $2 million.
To unlock the best financing options, you’ll need a minimum credit score of 720. However, financing is still available for borrowers with a credit score of at least 680.
For more information about this program, contact Matt Albert.
7. U.S. Bank
Alabama MDs and DOs (including residents and fellows) have access to the U.S. Bank doctor mortgage loan. Lawyers are also eligible.
Financing options include:
- 5% down for up to $1 million
- 10% down for up to $1.5 million
- 15% down for up to $2 million
Depending on your loan amount, you’ll need three, six or 12 months’ worth of cash reserves.
When calculating your DTI ratio, U.S. Bank will use your required monthly payment. However, if your student loans are in deferment, it’ll use 2% of your outstanding loan balance.
Is an Alabama physician mortgage right for you?
Physician mortgage loans are a little-known secret weapon for high-income professionals. They have great financing options and come with exclusive benefits that can make the home buying path more seamless.
A physician mortgage loan not only offers the opportunity to take advantage of $0 or low down payment options, but it’s also a tax-efficient way to maximize your finances as a whole when also paying down student debt.
This is because you can deduct paid mortgage interest up to the maximum allowed if you itemize your taxes. Currently, mortgage interest is fully deductible up to the first $750,000 of mortgage debt for homes purchased after December 2017.
Student Loan Planner Founder Travis Hornsby put together a great article about how to use a physician loan to save money on your student debt.
If a physician mortgage loan might be in your future, fill out the form below to receive multiple quotes from trusted physician mortgage lenders to purchase or refinance your next home. You can also reach out directly to any of the mortgage loan officers listed above to learn more about their physician mortgage program and eligibility requirements.
