5 Best Physician Mortgage Loans in Hawaii

Physician mortgage loans in Hawaii are perfect for doctors trying to buy a house in a high cost of living location given their low or no down payment options.

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Key Terms

  • A Hawaii physician mortgage loan, or “doctor mortgage,” comes with high loan limits and up to 100% financing, in some cases.
  • Lenders often extend favorable treatment to student loan payments 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, resulting in smaller mortgage payments.

Called “The Aloha State” by some and the “Paradise of the Pacific” by others, Hawaii was the last state to enter the United States, but is a favorite to many. This archipelago consists of 137 volcanic islands and sits off the West Coast of the United States in the Pacific Ocean. According to the Association of American Medical Colleges, there are 4,462 doctors living in the state of Hawaii. 

For many, including healthcare providers, owning a home in Hawaii may seem out of reach. Data from the Hawaii Association of Realtors shows the average sales price for single-family homes is $505,500 on the main island. If you are looking for a home on the island of Kaua’i, the average sales price for a single-family home jumps to $1,028,000.

Taking advantage of this market could be your goal. If so, and you are a medical doctor, a Hawaii physician mortgage loan program could help you to do so affordably. These programs may require a very low down payment, or even no down payment, too. 

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Pros/Cons of doctor mortgage loans in Hawaii

Hawaii physician mortgage loans could provide the edge you need to make a home purchase in the Aloha State’s complex real estate market. Before you commit to one of these loans, however, take a minute to consider both the pros and the cons. 

The pros associated with Hawaii physician loans are many and include:

  • Little to no down payment required
  • Higher mortgage limits for more purchasing power
  • No private mortgage insurance required, resulting in lower monthly payments
  • Favorable consideration of student debt  

With all those pros there are some cons to keep in mind. More purchasing power can cause borrowers to purchase “more house” than they can afford, for example. These loans can come with higher interest rates in some cases, as well. Also, a financial institution offering one of these products may also require that you enter into a secondary relationship with them by opening an account.

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5 Top Hawaii physician home loan lenders

If you’re in the market for a home in Hawaii, consider these physician mortgage loans that are available to state residents.

1. BMO Harris Bank

BMO Harris Bank is an established player in the mortgage industry that ranks 16th largest by total assets in the country. The bank offers a full range of financial products, including a physician loan to certain medical professions.

We spoke to a BMO Harris loan officer to get additional details about the doctor mortgage, many of which aren’t published. Here are some key terms and highlights:

  • Program is divided between Physicians and Dentists (DMDs and DDS) that are less than 10 years since their last training was completed (residency, fellowship, or medical/dental school, whichever ended last) and those over 10 years.
  • Less than 10 years practicing:
  • 0% down up to $1,000,000
  • 5% down up to $1,500,000
  • 10% down up to $2,000,000
  • More than 10 years:
  • 10% down up to $2,000,000
  • 10, 15, 20, & 30 year fixed rate or 5, 7, and 10 year ARM loans.
  • No rate premium, pricing premium, or interest rate increase for using the program.
  • No income history is required. They can use an offer letter or match letter that states your employer name, start date, salary, and job title. They can close the loan up to 89 days prior to the start date for the new contract. The contract can be for a W2 or 1099 pay structure as long as a guaranteed base salary/pay amount is listed.
  • Reserve requirements for loans up to $400,000 equal two months PITI for the new home, for loans over $400,000 the requirement is four months PITI.
  • The borrower is required to have liquid reserve funds at the time of closing, this would be required on top of any cash to close due.
  • Seller credits are allowed to assist with closing costs but cannot exceed the total of closing costs and cannot exceed the amount you, as the buyer, are contributing to the purchase.
  • Gift funds from a family member are allowed for any cash due at closing or down payment as well as the reserve requirements.

If you have a credit score as low as 680, BMO Harris can offer you $0 down up to $1,000,000 but it will take a credit score of 720 to get access to the full program.

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

2. 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, cannot refinance)
  • 5% down up to $1,500,000 (first time homebuyer – have not owned in last 3 years, cannot refinance)
  • 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 you 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.

3. 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 primary care and 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.

4. Bank of America

Bank of America is one of the original lenders (if not THE original lender) in the physician mortgage space. With over $3 trillion in assets, it’s one of the largest banks in the United States and chances are good that you are familiar with the company. Not surprisingly, they still offer a doctor mortgage product.

We reached out to a Bank of America mortgage officer to get more details about their program and this is what we learned:

  • 5% down up to $1,000,000
  • 10% down up to $1,500,000
  • Medical residents and fellows with a job lined up can close on a home 90 days before they start.
  • You can often exclude your student debt from your total debt when you apply for a mortgage.
  • Eligible medical professionals include salaried medical students and medical doctors who are about to begin their new employment/ residency for fellowship within 90 days of closing. Those employed in research or as professor are not eligible. 

While they may not have the most competitive program, they are a solid choice for a physician looking for a doctor mortgage, particularly if you’re already banking with Bank of America.

Of course, if you aren’t already a current Bank of America customer, they will require you to have, or open prior to closing, a checking or savings account. Applicants with an existing account with Merrill or Bank of America Private Bank prior to application also satisfy this requirement.

When it comes to reserves, Bank of America requires PITIA (Principal, Interest, Taxes, Insurance, Assessments) reserves of 4 – 6 months, depending on loan amount.

If applicant’s employment does not commence until after closing, in addition to the minimum cash reserves required, sufficient reserves to handle all debt obligations between closing and employment start date up to an additional 90 days must be verified.

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

5. Bank of England

If you thought the Bank of England was in the United Kingdom, you’ll be surprised to find out that the Bank of England is located in England, Arkansas but has the ability to lend in all 50 states (except NY).

We contacted the Bank of England to see if we could gather details about their physician loan program. Here is what we learned:

  • 0% down up to $1,000,000
  • 5% down up to $1,500,000
  • No PMI
  • Only available on 3, 5 and 7-year ARM terms
  • Program aimed at doctors who either seasoned practitioners or just out of medical school (in other words, they work with doctors of all experience levels).
  • Requires a credit score of 700
  • Requires two months of payment reserves.
  • You can be a US Citizen or a Permanent or Non-Permanent Residence.
  • They are able to exclude student loan debt in deferment or forbearance of 12+ months from the debt-to-income calculation.
  • You can only use this doctor mortgage program for single family residences, condos and two-unit properties.

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.

Is a Hawaii physician mortgage loan right for you?

At this point, you may be asking yourself if a Hawaii physician mortgage is the best fit for you. Here are some things to consider:

  • The median price in Hawaii is high, and a doctor mortgage can provide you with greater purchasing power.
  • If you are in an established job to which you are fully committed, the time is right to purchase a home.
  • Physician mortgage loans can come with higher interest rates when compared to conventional home loans, but that can be balanced out by the advantages, including the friendly consideration given to student debt. 

Examples of doctors who take out physician loans in Hawaii

Let’s take a moment now to go through some scenarios in which a physician might take out a physician loan in Hawaii. Reviewing these may help you determine for yourself whether or not you want to move forward with one of these financial products. 

A general practitioner who doesn’t have down payment

Kainoa is a general practitioner on Oahu with a thriving practice. Cash flow is tight right now, but he does want to buy a larger home for his family. With prices the way they are, a 20 percent down payment will wipe out the family savings account. 

As an alternative, Kainoa decides to go with a physician mortgage loan. It will allow him to purchase with zero down and also give him access to more purchasing power in the competitive Hawaiian housing market. 

A physician who has a large student loan debt balance

Samantha took out a number of student loans to get her through undergrad and medical school. It was all worth it from her perspective, given that she is now on the verge of starting an importing fellowship at North Hawaii Community Hospital.  

She plans on staying on the Big Island for the rest of career, and it has occurred to her that she should probably buy a home now before her job gets even busier. Unfortunately, all of her student debt works against her with conventional loans, skewing her DTI ratio dramatically. A doctor mortgage is her best option, giving her a way to finance a home, even with too much debt. 

If you’re looking to explore physician mortgage loans in other states, check out our national overview of physician loans 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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