6 Best Physician Mortgage Loans in South Dakota


Physician mortgage loans in South Dakota are good options for medical professionals seeking 100% financing options with no private mortgage insurance.

Key Terms

  • Physicians have access to competitive interest rates for high loan amounts up to $2.5 million or more, depending on the physician mortgage lender.
  • 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.

South Dakota is a state noted for its miles and miles of green pastures and open land. It is home to the Black Hills National Forest, Sioux Falls, Mr. Rushmore and the Crazy Horse Memorial. Often called “the land of infinite variety” due to its prairies, cities, and lush forested areas, South Dakota has a lot to offer today’s home buyers, including the almost 2000 working physicians who live there.

Home values here are competitive and growing rapidly. The Realtor Association of the Sioux Empire reported that the median home price here rose over 21% over the previous year. The key concern in South Dakota as it is in other areas is a limited number of homes for sale, which has pushed home values high. Current sales averages are at just under $250,000, in fact. 

The South Dakota physician mortgage loan program may help to alleviate some of the financial strain. For qualified providers like doctors and dentists, it may be possible to purchase or refinance a home with fewer limitations. These loans offer no or a low down payment requirement as well.

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Pros/Cons of South Dakota physician mortgage loans

If you are seriously considering a South Dakota physician loan to mortgage a home, you may like to weigh the pros and cons of entering into such a financial commitment. The pros are a tailored fit for many health care professionals and include higher loan limits, no PMI payments, and the option of 100 percent financing in some scenarios. Doctors will also receive special consideration when it comes to their student debt, which can affect their DTI ratios. 

What are the downsides involved? There are just a few, the most significant of which is that borrowers may have to pay a higher interest rate. Lenders also sometimes ask that you also open an account at one of their branches. Veterinarians, physician assistants and nurse practitioners are often excluded, but we encourage you to inquire with each lender to learn more. And, finally, those higher limits can be appealing, but in some scenarios, you may buy more house than you can afford. 

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6 Top South Dakota physician home loan lenders

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

1. First National Bank of Omaha

First National Bank of Omaha may sound like a community bank but they are able to lend to many states in the Midwest and Texas. With $17 billion in assets they  count as a medium-sized bank, perfect for your needs as a lender. Their health professional loan is also a competitive product.

We spoke to a loan officer at First National Bank of Omaha to learn more about their doctor mortgage. Here are the highlights:

  • 0% down up to $600,000 (requires 4 months of reserves)
  • 5% down up to $850,000 (requires 4 months of reserves)
  • 10% down up to $1,250,000 (requires 6 months reserves)
  • For non-doctor professionals: 5% down up to $750,000 and 10% down up to $1,000,000
  • Minimum credit score is 720
  • No private mortgage insurance
  • Student loan deferment and loan repayment programs
  • Employment contracts that have been fully executed with no contingencies. Must start new job work within 90 days of closing
  • 30 year fixed rate loans and 10/1 ARM loan options. 10/1 ARM loans offered at a discounted rate, fixed for the first 10 years.

When you’re ready to connect with a loan officer experienced in doctor mortgages, use our form to quickly match with physician 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 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. 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 full-time 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.

4. Citizens Bank

Citizens Bank is one of the largest banks in the United 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 refinancing, personal banking and 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. 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.

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 professors 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 a South Dakota physician mortgage loan right for you?

If a South Dakota physician loan is on your list of mortgage options, take some time to assess whether or not it works for you in the long term. Your job should be stable, and you should be more than happy to stay in that position for years to come. 

You also want to make sure that you are fine with paying a higher interest rate, which can tally up to a significant sum over the life of a loan. 

As a final consideration, look at the status of your student debt. If it will weigh you down for the foreseeable future, a doctor mortgage is your best bet. If you can dig out from under it sooner rather than later, a conventional loan may be a good alternative in a few years. 

Examples of doctors who take out physician loans in South Dakota

Who are the South Dakotans turning to physician loans to finance homes? They are professionals just like you whose particular situations make these financial products an easier fit. 

Doctor who only has 10 percent to put down on a home

When Maggie became a doctor, she knew that she would want to remain in her home state of South Dakota. Now that she has a job in the oncology department at Averra McKinnon Hospital, she wants to buy a home. She only has 10 percent to put down, however, which is limiting her options with conventional mortgages. 

Turning to a doctor mortgage allows her to put down even less and she gets to enjoy a range of other benefits on top of that, including special consideration of her student debt from medical school. 

Doctor who wants to maximize leverage

Mike’s new fellowship means that he is on track to enjoy a great career in orthopedics. It doesn’t, however, come with a regular paycheck, and that’s something local, conventional mortgage lenders expect. 

Fortunately, a lender offering doctor mortgages in Pierre understands that fellows don’t always have traditional work profiles. His signed contract suffices for the lender as proof of employment, and he is on track for approval on a new home mortgage. 

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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