6 Best Physician Mortgage Loans in Indiana

Physician mortgage loans in Indiana are ideal for medical doctors interested in avoiding private mortgage insurance and financing up to 100% of a home purchase.

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Key Terms

  • An Indiana physician mortgage loan comes with high loan limits and options for up to 100% financing.
  • Student debt typically receives favorable treatment by lenders who make physician loans, allowing for an easier qualification process.
  • Physician mortgages don’t require private mortgage insurance (PMI) even with a 0% down payment.

Commonly known by its nickname of “The Hoosier State,” Indiana was the 19th state to enter the United States on December 11, 1816. Part of the Midwest, this state is home to a number of parks and attractions, including the hugely popular auto racing venue, the Indianapolis Motor Speedway. It is also home to over 15,000 working physicians.

In March of 2022, 6,715 homes closed for the month, a drop of about 6.5% from the same time the year before. Also notable is that home prices for the same period rose by 15.3%, to $224,000, according to the Indiana Association of Realtors. The average sales price also rose 14.2% for the month. Inventory grew as well, ahead of the spring market, by about 4.3%.

With such a rambunctious housing market in the Hoosier State, Indiana doctors and dentists thinking about buying a home may want to explore a wide range of options when it comes to financing. The Indiana physician mortgage loan program may help to make it affordable to do so as well, with its no to low down payment requirements. For a medical resident about to start their first job, use of the employment contract makes it easier to get approved for these doctor loans quickly.

Bear in mind that for a first-time homebuyer, there are specific requirements for each of the lenders. However, when compared with application and underwriting for regular loans, there is a higher level of accessibility for physician home loans for medical residents.

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Indiana physician mortgage loans: The pros and cons

As you begin to familiarize yourself with doctor mortgages, it can help to also get to know some of the pros and cons that come with these loans. For many doctors and professionals in Indiana, the “pros” offer just the advantages they need to make a home purchase. Most physicians are moving to a new area after residency and don’t have traditional options like a refinance or regular loan from an equal housing lender as an option for them.

Instead, they might find a perfect home on the NMLS but need a special way to buy it, and physician home loans might be the perfect answer. The down payment options are a huge benefit for these loans, since a lower down payment is possible. However, bear in mind that even though you might have more spending power, that future mortgage payment could be very high if you buy too much home.

What are some of these advantages? It’s an impressive list: 

  • Little to no down payment required
  • No private mortgage insurance required
  • Limits that are much higher than most conventional loans

Indiana doctors may also enjoy the fact that physician mortgage lenders extend favorable treatment to student debt. Many doctors are burdened with a good amount of debt, making it difficult for them to qualify for other loan products. 

And the “cons” involved in a physician mortgage? That list is not that comprehensive, but it is still worth considering. Higher limits can make it easier to get underwater with a loan, for one. You may also need to open a savings or checking account with your lender. And, of course, there is the fact that these loans can sometimes come with higher interest rates. Those monthly payments should be in line with your budget in your new job, so don’t take on too much house in your loan payment as a healthcare professional.

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6 Top Indiana physician home loan lenders

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

1. Huntington Bank

Huntington Bank is the 26th largest bank in the United States. Operating primarily out of the Midwest, their mortgage group can service a large part of the country. Huntington has a competitive physician loan product with no money down financing options.

We contacted a loan officer at Huntington Bank to gather information about the doctor mortgage and here’s what we heard back:

  • 0% down payment up to $1 million
  • 5% down payment up to $1.25 million
  • 10% down payment up to $2 million
  • Maximum financing up to $2 million
  • Eligible degrees are: MD, DO, DDS, DVM or DMD
  • Residents are eligible
  • Minimum credit score is 700
  • 2 months reserves required (6 months for jumbo loans) – reserves can be held in bank or investment accounts
  • Gift funds for down payment are OK
  • 30-year and 15-year fixed-rate mortgages
  • ARMs available in 7/6, 10/6 or 15/6 terms
  • Can close on the strength of a new employment contract without paystubs
  • No private mortgage insurance
  • No prepayment penalty

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.

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. 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.

4. Blueleaf Lending

Blueleaf Lending is a doctor mortgage program open to medical doctors, dentists, podiatrists, ophthalmologists and veterinarians. They are also able to work with professionals that have an employment contract (or verification of terms of employment acceptance) for purposes of qualifying your income.

We contacted a Blueleaf Lending mortgage loan officer to get more details on their physician mortgage program. Financing is available for:

  • 0$ down up to $750,000
  • 5% down up to $1,250,000
  • 10% down up to $2,000,000
  • No prepayment penalties.
  • 1-2 Unit Properties, Condos, Townhouses, PUDs and Modular Homes OK.
  • Non-Warrantable Condos are OK up to a LTV of 90%.

Some of the strengths of the program is that there are no time restrictions on when a client starts their new employment vs the closing date if the applicant has enough reserves.

Most lenders won’t let you close on a new home purchase if you are outside of a 60-90 day window before your start date, so this would allow recent graduates to qualify much earlier in the process so long as they have reserves to cover the mortgage and escrow payments.

Blueleaf Lending can accept a debt-to-income ratio up to 50% and will allow business assets and gift funds to cover the down payment, closing costs and reserve requirements.

If you’re a physician who has been hired as a contractor or “1099 employee” (something more and more common these days), Blueleaf Lending will not require you to establish a 2-year history before counting your income, which is a huge advantage for new docs that find themselves in contractor positions.

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.

5. 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.

6. 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
  • 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 loan officer, use our form to quickly match with eligible loan programs based on your specific circumstances.

Is an Indiana physician mortgage loan right for you?

At this point, if you are seriously considering a physician mortgage loan, you may want to ask yourself a few questions:

  • Are you satisfied with your current job? Make sure that you are before moving forward with a doctor mortgage. 
  • Are you happy to remain in your region of Indiana? Moving too soon after taking out a mortgage can put undue stress on your finances. 
  • Finally, are you alright with paying a higher interest rate? Though it may cost you a few extra dollars over the life of your mortgage, it may be worth it, considering the many benefits of an Indiana doctor mortgage. 

Examples of doctors who take out physician loans in Indiana

Let’s take a moment now to walk through some sample narratives that describe the types of doctors who are taking out physician loans in Indiana. Reading through these just might show you that many of these individuals have needs similar to your own. 

Doctor who has too much student debt

Despite just signing a contract for a high-paying position at Kindred Hospital Indiana, Deanna has been unable to qualify for a conventional home loan. Her debt-to-income ratio, or DTI ratio, is still quite high, thanks to the student debt she racked up during medical school. Turning to a physician mortgage loan is a great alternative; it gives special consideration to her student debt, and her signed contract is acceptable as proof of income.

A dentist who doesn’t have a down payment

Ethan and his wife have been saving for years. Now that his dental practice is established and doing well, they have decided to buy a home.  Given housing prices these days and the stringent requirements that come with conventional loans, Ethan won’t be able to do that without wiping out most of his savings to make a big down payment. Instead, Ethan has decided to turn to a doctor mortgage. A regional bank extended friendly terms to the dentist, and he was able to get 100 percent financing on a new house. 

Looking for a physician loan in a different state?

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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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