Washington D.C. is a small-in-size but big-in-power city that sits on the Potomac River, serving as the nation’s capital. It’s home to the White House, the Capitol, and the Supreme Court, but also to some historically charming communities, beautiful parks and great tourist sites. It is a city with much to offer its internationally diverse community of people.

The DC Realtors Association reported that in the most recent month 916 homes were sold in the city. The median sales price for those homes was $650,000, which is about 5.3% lower than the previous year at the same time. Yet, the area has high home values and limited inventory, which can make it hard to buy into in some cases. 

The District of Columbia is home to some 5,950 physicians, meaning there are plenty of medical professionals in the mix who are looking for a home. The physician mortgage loan programs in the Washington D.C. area may help some doctors and other professionals looking to buy a home. For qualified individuals, these financial products may reduce some of the complexities involved in obtaining a loan, such as having to put down a large down payment.

Advantages/Disadvantages of Washington D.C. physician mortgage loans

Weighing the pluses and minuses involved in a financial product is an important first step when considering a loan. We’ve summarized both the pros and cons of District of Columbia physician mortgage loans below to help you with your decision making.  

The pros involved in District of Columbia doctor mortgage, include:

• Little to no down payment needed
• Higher limits, meaning you can get a bigger house
• No PMI payment(s)
• Special consideration for student debt

For doctors, who might have used a lot on credit cards and have limited funds in checking accounts, it’s hard to qualify for regular loans because of credit score issues and the impact of student loans. Limited earning potential in residency is also a factor in the challenges of coming up with a down payment. This makes home ownership hard for people who are just on the cusp of great earning potential, and that’s where doctor mortgage loans come in to help if you locate a perfect place to buy on the NMLS.

The cons involved in entering into a doctor mortgage include:

• Higher limits may cause you to buy more house than you need
• Higher interest rates, in some cases
• A required relationship with the bank (i.e. opening a bank account)

Is a District of Columbia physician mortgage loan right for you?

So, is a D.C. physician mortgage right for you? Determining this means asking yourself some questions about your life, career, and financial goals. 

If you don’t have a first home to refinance, coming up with a down payment can be really challenging for medical residents. If buying a bigger or more expensive home, getting a traditional home loan might not be an option. Going that traditional route like working with an equal housing lender or trying to qualify for a VA loan, where applicable, might not give you enough buying power or benefits to come through the home buying process.

For healthcare professionals who want to own real estate in D.C., one of the best options is to consider a doctor mortgage. Like a traditional loan, monthly payments are due throughout the life of the mortgage, which means it’s important to confirm you can cover repayment with your future earnings. Physician home loans enable residents and upcoming medical professionals to become a homeowner with some upfront benefits while still being able to make mortgage payments over the life of the loan.

But before you commit, are you in a job that you enjoy and to which you want to stay? If you are in the very early days of a job, no matter how lucrative, it may not be the right time to buy. If you have been in your job for at least a few years and feel established in your role, the time may be right. 

Next, take a look at your overall financial picture. Are you okay with paying a possibly higher interest rate? This can add up over the life of your loan, but may be worth it. If you believe that you can save for a down payment on a conventional loan in a few years, you may want to wait.  

Finally, know that the bank or lender may very well want to have a relationship with you for years to come. This can mean making a commitment to a bank account, be it a checking or savings account; to many, this is a small “price” to pay for the convenience of a doctor mortgage.  

Examples of doctors who take out physician loans in Washington D.C.

Let’s take a look at some of the physicians in the District of Columbia who are taking out physician loans. Reading through these descriptions may help you understand more about the process and help you decide whether or not you want to take out a doctor mortgage. 

Doctor who is looking to maximize leverage

Sabrina’s Northwest dermatology practice is doing quite well. She’s popular with the Bethesda/Chevy Chase set and respected by her peers. Ten years in, she’s managed to make some investments, and her portfolio is doing well. Overall, her financial picture is healthy, but she doesn’t have that much cash or that many liquid assets. 

A house is available in her neighborhood and she wants to make an offer. What should she do about the down payment on a conventional loan? With little cash on hand, she would have to liquidate some of her holdings. Fortunately, she knows that a lender in the area is extending doctor mortgages to professionals just like her; this no money down option will let her purchase the home without losing any of her leverage. 

A physician who gets the best rate with a physician mortgage

Kwame is a partner in a family practice in Adams Morgan. He and his growing family are looking for a new home, and he’s been comparison shopping various mortgages. He could qualify for a conventional loan, but some investigation has revealed that a doctor mortgage offered by a local bank will actually get him a better rate. This will mean thousands in savings over the life of his mortgage, translating into money in the bank for his family. 

Looking for a physician loan in a different state?

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