5 Best Physician Mortgage Loans in Arizona

Physician mortgage loans in Arizona could be a good option for doctors, dentists and other professionals interested in 0% down mortgages.

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Key Terms

  • Student loan payments typically receive favorable treatment with a doctor loan, making it easier to qualify for a mortgage.
  • Physician mortgages don’t require private mortgage insurance (PMI) even with a 0% down payment.
  • An Arizona physician mortgage loan comes with high loan limits and options for up to 0% down.

Contrary to popular belief, Arizona isn’t all hot weather and deserts. The western state is a diverse place, experiencing significant snowfall in the winters and boasting several ski resorts, in addition to its classic arid landscapes. Arizona is also, of course, home to the internationally renowned Grand Canyon National Park – one of the world’s seven natural wonders. 

With so much to offer, it’s no wonder Arizona’s housing market is experiencing one of the biggest surges in the country, growing at a rate of about 11% year-over-year. Recent statistics from the National Association of Realtors show that Arizona real estate has an attractive average home price at $477,219.

Buying in Arizona can be particularly appealing for high-earning professionals, many of which can qualify for real estate benefits such as physician loans in the state. These physician mortgage loan programs extend a number of advantages to the 18,343 doctors and other professionals in Arizona, allowing them to purchase a home sooner than they might expect. 

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The good and bad parts of Arizona physician mortgage loans

Any big purchase should come with some careful consideration of the pros and cons involved. What are the pros and cons of going with an Arizona doctor mortgage? The pros are impressive, giving Arizona doctors and professionals a much easier entry point to the housing market. With a physician loan, you can get:

  • 100% financing, or 0% down
  • No PMI payment(s)
  • Special considering for student loans 
  • Higher purchasing price limit

And the downsides? There are a few, though many professionals feel the pros outweigh the cons. Some of the cons associated with doctor mortgages include:

  • The risk of purchasing too much house
  • Taking on more debt
  • Higher interest rates, at times, when compared to conventional loans
  • The expectation that you will become a customer of the lender/bank

Keeping these pros and cons in mind can help you make an informed decision when choosing between a physician loan and other conventional options. For healthcare professionals who locate an ideal real estate property on the NMLS, such as medical residents who have just received a high offer, these loans make sense. New doctors can use these to buy a new home without having to bring in a substantial down payment. This provides quicker and easier access to homeownership, but all doctors should carefully research the home buying process with a physician home loan. Qualifying doctors should do their research to decide on the right lender.

For someone who doesn’t have the opportunity to tap into refinancing to buy a second home or a credit card to assist with the purchase process, a physician home loan could be an option for a new physician to get a perfect place.

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5 Top physician home loan lenders in Arizona

Some of these lenders only offer mortgage loans to attending physicians, while others can lend to those still in residency.

1. Alerus Mortgage

Alerus Financial Corporation is a publicly traded chain of financial institutions headquartered in North Dakota. They offer banking, mortgage, wealth management and retirement services, including a physician loan for those doctors looking to buy a house.

We contacted a loan officer at Alerus to learn more about their physician loan program and here are the key terms that you need to know:

  • Must be within your first two years of practice to qualify.
  • 0% down up to $750,000
  • 5% down up to $1,000,000
  • ARM and fixed rate financing available

Alerus also has a special $20,000 closing guarantee with all mortgages. The $20,000 guarantee is paid to the seller if the loan does not close based on the conditions and expiration date of the approval as outlined in the Alerus pre-approval letter.

In other words, this $20,000 guarantee gives you extra negotiation leverage when competing with all-cash home purchase price offers. If your mortgage doesn’t close, the seller is compensated $20,000 for their trouble.

Of course there’s some fine print on the guaranty so keep in mind that it’s not available for new construction and isn’t applicable if:

  • Borrower, seller or any third party cause the delay or elect not to close on the real estate sale.
  • Borrower fails to sign required disclosures or provide key documents by the requested due date.

The $20,000 guarantee, if applicable, is available to the seller only and not any of seller’s agents, representatives or related parties.

When you’re ready to connect with a loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

2. City National Bank of Florida

City National Bank of Florida is a medium-sized bank with over $22 billion in assets. Although they are headquartered in Florida, they offer a physician loan in all 48 contiguous states and are eager to find physicians and other professionals as new customers.

We spoke with a loan officer at City National Bank of Florida to gather details on the doctor mortgage program. Here is what we learned:

  • Physicians, Dentists, Attorneys and CPAs are eligible
  • 3% down up to $650,000
  • 5% down up to $850,000
  • 10% down up to $1,250,000
  • 10.51% down up to $2,500,000
  • 15.51% down up to $3,000,000
  • Primary residence and vacation homes are available (higher down payments required for secondary houses)
  • Can finance condos but only with a 20% down payment
  • Minimum credit score required is 660 but better rates/options require 720 credit score
  • Self-employed individuals need to provide 2 years of income verification

When you’re ready to connect with a loan officer experienced in doctor mortgages, use our form to quickly match with eligible loan programs based on your specific circumstances.

3. Flagstar Bank

Flagstar Bank was chartered in 1987 and holds around $23 billion in assets, making it a medium-sized bank. However, they punch well above their weight when it comes to mortgages and operate as the sixth largest bank mortgage originator nationally. Not surprisingly, a big part of their success has been a doctor mortgage program.

We contacted Flagstar Bank to learn more details about their physician loan. Here are the key terms that you need to know?

  • 5, 7 & 10 year ARM  products
  • 0% down up to $1,000,000 (first time homebuyer – have not owned in last 3 years)
  • 5% down up to $1,500,000 (first time homebuyer – have not owned in last 3 years)
  • If not a first-time home buyer
  • 10% down up to $1,000,000
  • 15% down up to $1,500,000
  • 20% down up to $2,000,000
  • 25% down up to $2,500,000
  • Fixed products
  • 10% down on the jumbo fixed to a max loan amount of $1,000,000 with no PMI
  • 20% down on the jumbo 30 year fixed with a max loan amount of $3,000,000
  • For first time home buyer (have not owned within last 3 years):
  • 3% down up to $647,200
  • If not a first time home buyer:
  • 5% down up to county limit (with and without PMI)
  • Medical doctors and lawyers are eligible. We weren’t able to confirm that the program is available to dentists and other (non-doctor) medical professionals, but encourage you to contact them to confirm.

The total reported lender fees as of the date of this article were $1395 ($550 processing and $845 for underwriting).

Another benefit of Flagstar is that they can submit a full file to underwriting for an actual loan approval (not pre-approval) without having a purchase contract signed, which makes your competitive with all cash offers and the process less stressful for you. There is no application fee or prepayment penalties. They also offer a float down, buy down, and recast option.

When you’re ready to connect with a loan officer experienced in doctor mortgages, use our form to quickly match with eligible loan programs based on your specific circumstances.

4. Keybank

Keybank has over $170 billion in assets and is the 24th largest bank in the Untied States. They operate throughout 39 states but can originate mortgages in nearly all 50, making them a popular choice among medical doctors throughout the country. One of their key financial products is a physician loan.

While Keybank doesn’t post a lot of information about their doctor mortgage online, we were able to get in touch with a loan officer at the bank to get all the important details. See below for an overview of the program details:

  • 0% down up to $1,000,000
  • 5% down up to $1,500,000
  • 15% down up to $2,000,000
  • No private mortgage insurance
  • Gifts permitted for down payments
  • Can close on the strength of an employment contract up to 90 days prior to the start of employment
  • Minimum credit score is 700
  • Student loan debt can be calculated based on income driven student loan payments
  • Fixed loans offered in 10, 15, 20, 25 or 30-year terms
  • Adjustable-rate mortgages offered in 5/6, 7/6 and 10/6 options
  • No minimum or maximum years in practice for eligibility
  • Reserve requirements are: 2 months (loans under $500K), 4 months (loans between $500K – $750L), 6 months for loans over $750K plus an additional 2 months if closing prior to start date. Retirement accounts count toward reserve requirements.
  • US Citizens, Permanent Residents and H1B Visa holders are eligible
  • California loans require a minimum of 5% down

When you’re ready to connect with a loan officer experienced in doctor mortgages, use our form to quickly match with eligible loan programs based on your specific circumstances.

5. Citizens Bank

Citizens Bank is one of the largest banks in the Untied States. I bet you didn’t know that it’s headquartered in the smallest state: Rhode Island. With over $160 billion in assets, it’s no surprise that Citizens offers a full range of financial products, including a physician loan.

We contacted a loan officer at Citizens Bank to learn more about their doctor mortgage loan program specifically. Here are details you won’t find anywhere else:

  • 5% down up to $850,000
  • 10% down up to $1,000,000
  • Practicing licensed medical doctors (MD and DO), dentists (DDS and DMD), residents and research physicians are eligible
  • Licensed residents, fellows and interns can borrow a maximum of $600,00 (or $400,000 if unlicensed)
  • No more than 10 years out of residency
  • Self-employed professionals are eligible with a two-year history of self-employment income
  • New medical professional graduates who are under contract for residency within 60 days of closing and have not yet obtained a license are eligible
  • No private mortgage insurance
  • 40% max debt-to-income ratio
  • Student loan debt that’s deferred for more than 12 months from the date of closing can be excluded from DTI calculations
  • Construction-to-permanent loans available with a maximum of 89% financing
  • Fixed rate or adjustable-rate mortgage options
  • Interest-only option on certain adjustable-rate mortgage options (max financing at 89%)

When you’re ready to connect with a loan officer experienced in doctor mortgages, use our form to quickly match with eligible loan programs based on your specific circumstances.

Does a physician loan in Arizona make sense for you?

Asking if an Arizona physician loan is right for you is a valid question. What are some of the factors you should consider when making this choice?

Start off by asking whether the time is right. If you have just started a job, it may not be the right time to commit to a big purchase. It often takes as many as two years to determine whether a job can work for you. Committing to a home purchase may be premature if you are still in the early days of a job.

Next, ask yourself how much house you really want to invest in. One of the most appealing features of doctor mortgages is that you can get the loan with zero down. This, however, can drive some to purchase a bigger or more expensive home than they really need. Limiting your purchasing price to around two times your salary is a good idea if you do move ahead with a physician loan. 

Are lower rates more appealing to you? In that scenario, you might consider waiting to see whether you can save towards a large down payment and go with a conventional mortgage instead. 

Remember, too, that lenders extend physician loans to high-earning professionals like you because they believe you will be a good, long-term customer. Making a commitment to a doctor mortgage comes with advantages, including this financial relationship with the lender, but could be more than you are willing to take on for the time being. Some of the typical options with equal housing lenders, FHA loans, a refinance, or other lender opportunities might not be the right fit for you, but a physician’s home loan could open the door.

Examples of physicians who take out doctor mortgages in Arizona

Understanding how and why doctors and other professionals take out physician loans in Arizona can add another layer of clarity to your decision making process. Here are just a few scenarios that exemplify the doctors who apply for these financial products. 

Anesthesiologist who doesn’t have down payment

Carmen is just beginning her residency in anesthesiology at the University of Arizona Health Science (UAHS) and has her sights set on a long-term career in Tucson. She hasn’t been able to save up much during medical school, having committed most of her day to her studies. Most of her cashflow is now going toward student debt repayments, as well. 

Another resident at UAHS let her know about doctor mortgages, including the appealing benefit of getting a mortgage with no money down. Since Carmen knows she wants to stay in Tucson and wants to establish herself now early on in her residency, the time is ideal to move ahead with an Arizona physician loan. 

Medical doctor interested in maximizing leverage

Marcus is in his second year as an attending physician at Banner – University Medical Center in Phoenix. His salary is great, and he has been able to make some headway with his student debt. He has even invested some of his cash on hand. This, however, has tied up his liquid assets and he doesn’t have the funds for a big down payment. 

Since his portfolio is doing well, he doesn’t want to sell. Since his salary is so high at this point in his career, he’s been told he’s a great candidate for a doctor mortgage with zero money down. Rather than let go of his investments, Marcus has decided to take out a physician loan to purchase a home for his growing family. 

If you’re looking to explore physician mortgage loans in other states, check out our national overview of doctor mortgages as a starting point in your search.

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Joshua Holt

Joshua Holt is a licensed mortgage loan originator (NMLS #2306824) and founder of Biglaw Investor. His mortgage expertise lies in the areas of professional mortgage loans, particularly for lawyers, doctors and other high-income professionals. Prior to Biglaw Investor, Josh practiced private equity mergers & acquisition law for one of the largest law firms in the country.

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