5 Best Physician Mortgage Loans in Louisiana

Physician mortgage loans in Louisiana are available to medical professionals and offer 0% down payment options.

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Key Terms

  • A Louisiana physician mortgage loan comes with high loan limits, no PMI and options for up to 100% financing.
  • Student loan payments typically receive favorable treatment with a doctor loan, making it easier to qualify for a mortgage.
  • Relaxed underwriting requirements can help new physicians purchase a home before starting a new job.

Referred to alternately as the “Pelican State,” the “Bayou State,” “Creole State,” and “The Boot,” Louisiana is home to a diverse array of cultures and the beautiful and unique city of New Orleans. It’s also home to cities like Shreveport. Its major sports teams and number of National Parks and historical sites make it a great place to live, including more than 12,000 active physicians

Though the state offers a varied housing market, the area of Greater Baton Rouge saw an 8.3% decline in May of 2022 in new listings. About 1,240 homes sold in the state that month and the median sale price was $252,000. Homes took, on average, 32 days to sell, according to Louisiana REALTORs, the state’s real estate association.

For doctors and dentists thinking about buying now, there are affordable days to do so, including the Louisiana physician mortgage loan program. 

This program enables qualified professionals to obtain a home loan with a low or no down payment requirement. Physician home loans are just one options for new doctors and medical residents, but it’s important to look at both the pros and cons for medical professionals.

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Advantages/Disadvantages of Louisiana physician mortgage loans

There are lots of pros that come with Louisiana physician mortgage loans but, as with anything, a few cons, as well. The positive aspects of these mortgages are many, including the fact that they include special consideration for student debt. Additional checks in the “pro” column on these loans include high loan limits and relaxed underwriting that allows lenders to approve you on a loan before the ink is dry on your contract, in some cases. This helps qualifying doctors get a dream home from the NMLS without some of the challenges of regular loans or refinances.

Many residents might need to move to a new location for a position after residency is complete. This means that a refinance of existing property won’t make sense, but buying a new home may be ideal for that physician. Residents often come with high credit card and student loan balances, making it hard to get an approval from traditional banks.

All of that comes with some “cons.” For one, your interest rate may be higher than with a conventional mortgage. Your lender may also request that you open an account with them. That may be a savings account, a checking account, or another option; their goal with that is to keep your business in the long term. For healthcare professionals, carefully think through the loan repayment requirements when deciding whether or not to work with a physician loan mortgage company.

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5 Top Louisiana doctor mortgage lenders

Some lenders in Louisiana only offer physician loans to attending physicians, while other programs can lend to those still in residency or fellowship.

1. First Horizon Bank

First Horizon Bank is a full-service bank located in Memphis, Tennessee. They recently completed a merger with Iberia Bank and are scheduled to be merged into TD Bank in 2023, making this an active bank. They also happen to have a competitive doctor mortgage program.

We spoke with a loan officer at First Horizon Bank to get some inside information on its doctor mortgage program for you. Here’s what you need to know:

  • 0% down up to $1,500,000
  • 30 Year Fixed Rate
  • ARMs available
  • Primary residences only
  • Student loan debt is not included in calculating debt-to-income ratio when deferred for more than 12 months.
  • Maximum financing amount is $2 million
  • No PMI
  • No pre-payment 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. 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.

3. 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.

4. 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.

5. 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.

Should you use a Louisiana physician mortgage for your next home?

How can you decide whether or not a Louisiana physician mortgage is the best option for you? Start by assessing where you are in your career. If you are happy in your current position and plan on staying in your area for many years to come, a doctor mortgage will work well for you.

Also, consider the higher interest rates that can sometimes come with these types of mortgages. Is that something with which you are comfortable? Many doctors are, given that these loans are so generous in other aspects. By weighing these factors, you can make a more clear-eyed decision about your suitability for a doctor mortgage in Louisiana. 

Examples of doctors who take out physician loans in Louisiana

You may be surprised by the doctors and professionals in the Bayou State that are taking out physician loans. They are very likely just like you, and on similar trajectories. They range from those new to the field to professionals with decades of experience. 

An OB-GYN who doesn’t have a down payment

As an OB-GYN, Debra gets a lot of gratification from her work. She loves working at her office in New Orleans and is fond of her staff and her devoted patients. She and her spouse are ready to purchase a home, but prices in the Greater New Orleans region have been escalating. Twenty percent down on a conventional mortgage will wipe out their savings, and then some. A doctor mortgage gives Debra an easier way to access financing. In fact, she was able to qualify for 100 percent financing on her dream home. 

Physician who prefers stock investments and wants leverage

Rasheed has worked hard to establish a stellar reputation in pediatrics. After a decade in practice, he is one of the preeminent doctors in his part of Louisiana. With his great income and established job, he is a good candidate for a mortgage, but he doesn’t necessarily want to liquidate his investments to put a lot of money down on a home. Instead, he decided to go with a Louisiana physician loan with high limits and no money down required. 

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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