Updated: Nov 15, 2022
Homeownership is one of the trademark signs of the American Dream. And it is that way for Americans of all different backgrounds, education levels, locations, and careers. Doctors and other healthcare professionals are no exception, though they are in some ways disadvantaged.
Years of medical school and on the job training mean that they oftentimes don't start their careers until well into their 30s. And when they do, it isn't unheard of to have six digits of student loan debt over their heads. This debt is restrictive and in many instances may prevent them from buying homes.
This is where physician mortgages come into play.
At a glance: Citizens Bank's physician mortgages
Up to 95% for loans up to $850k
Up to 89% for loans up to $1M
Maximum loan amount
Minimum credit score
CT, DC, DE, IL, IN, KY, MA, MD, ME, MI, NC, NH, NJ, NY, OH, PA, RI, SC, TN, VA, VT, WV, GA, KS, LA, MS and MO
What is Citizens Bank?
Citizens Financial Group, not to be confused with First Citizens, is the 17th largest bank in the United States. Headquartered in Providence, Rhode Island, Citizens has a large presence in the Northeast and Eastern Seaboard. Offering traditional banking services such as checking/savings accounts, wealth management, student loans, and mortgage services.
Less talked about is Citizens' physician mortgage program, from which home loans are offered to doctors based on their career and future earning potential, rather than the merits of their mortgage application.
What are physician mortgage loans?
Physician mortgage loans are a special type of home loan program offered by lenders to allow high earners to finance a home even if they don't meet traditional underwriting guidelines. Most often, doctors need these "doctor loans" because their high levels of student loan debt have left them with debt-to-income ratios above acceptable limits.
Since many doctors are so indebted after medical school and training, it is common for physician mortgages to also have waived or lower down payment requirements. And because young doctors are likely to become among the highest earners in the entire country, it makes sense for banks to offer these home loans as a way to begin building long term relationships that may lead to more lucrative wealth management services in the future.
Typically, doctor home loans can be used to buy or refinance a home.
The Citizens Bank physician mortgage program
At this time, Citizens offers doctor home loans to medical providers that are either licensed medical doctors (MD or DO) or dentists (DDS or DMD) and are less than 10 years removed from their residency. Residents and fellows may also qualify for the program.
You'll only need a 5% down payment on loans up to $850,000, a 10% down payment on loans up to $1 million, and a 15% down payment on loans up to $1.5 million, which also happens to be the most you can borrow.
You'll also have a number of options for your term. Other than fixed rate mortgages, you may also consider an adjustable rate mortgage (ARM) with 3/1, 5/1, 7/1, and 10/1 terms.
Additionally, Citizens offers:
Waived private mortgage insurance (PMI)
No prepayment penalties
Closing up to 90 days before your employment begins
Pros and cons to a Citizens Bank physician mortgage
Before you rush into applying for a mortgage, you should do your due diligence and make sure that a lender is the right fit for you. Here you'll see our assessment of the main pros and cons to a doctor mortgage with Citizens Bank.
1. Waived private mortgage insurance
As a perk, Citizens waives any need for private mortgage insurance (PMI), no matter what percentage of the home's purchase price is financed. Generally, most Conventional programs carry mandatory PMI on loans with a down payment of less than 20%. So depending on interest rates at the time you apply for your physician mortgage, it may make sense to only put down the minimum required to receive your loan.
2. Flexible mortgage terms
Citizens offers both fixed rate and adjustable rate mortgages, often known as ARMs. Furthermore, they offer a variety of terms to help you take the mortgage that leaves you with the monthly payment that works best for you.
Your fixed-rate term options are 10, 15, 20, or 30 years, while you can also opt for an ARM options of 3/1, 5/1, 7/1, and 10/1.
3. High maximum loan amount
Doctors using the Citizens program can purchase homes up to $1.5 million, considerably higher than other lenders. And while this may not always be the financially prudent decision, it is nice to see that , especially in high cost of living states such as CA, CT, MA, NY, and NJ.
1. No 100% financing option
Citizens Bank does not offer any 100% financing doctor loans like some of their competitors do. But with 95% financing on loan amounts up to $850,000, this isn't a huge deal in most instances.
But for doctors just starting out with an interest in buying a home in short order, this down payment requirement could be enough for some to look for another lender.
2. Only doctors and dentists are eligible
Citizens' program is a little limited in which healthcare professionals are eligible. At this time, only physicians and dentists may participate in this doctor loan program. Contrast this with other lenders on the market, some of which offer loans for chiropractors, veterinarians, and other providers.
Applying for a Citizens doctor loan
If you decide that Citizens is a lender you'd like to pursue, you'll want to complete the following steps in order to apply for and receive your loan.
Given the special parameters of this program, it is probably best practice to engage with a loan officer that is well versed in the doctor program. Telling the bank that you are a physician interested in the program will get you in the right hands.
Applying for a mortgage is an in depth process that will require you to produce some or all of the following documentation:
Two or more recent paystubs (if working)
W-2 history (if applicable)
Student loan information
Physician mortgage tips and tricks
Up to this point, we've provided you with a lot of information about the Citizens Bank physician mortgage program. Now, we're going to mix things up and provide you with tips and tricks as you consider whether a doctor loan may be right for you.
1. Keep your down payment to a minimum
Unless the interest rate you receive feels high, you likely won't want to come up with an enormous down payment. We know that this sounds counterproductive to the advice that most homeowners receive. But we have a reason for feeling this way.
Since physicians oftentimes have huge amounts of student debt, being able to keep as much cash in your pocket is important, since it may allow you pay off your debt and work towards life's other financial goals more quickly. We feel this way in part because, other than the extra mortgage interest that you will find yourself paying, there is no real downside to maintaining some financial flexibility.
The reality is that there is no one perfect solution for everybody. You need to take into account your income, other debt(s), and other variables too.
2. Don't borrow the maximum offered by your lender
Though physician loan programs oftentimes carry really high borrowing limits (Citizens allows you to borrow up to $1.5 million, for example), it may not be prudent to borrow up to that amount - even if you can afford it.
The extra thousands that you would have either put towards a down payment or your early mortgage payments can provide you a nice buffer as an emergency fund, or allow you to begin renovating any rooms that may need an update.
Our free mortgage calculator
We've found that many first-time buyers, doctors included, get a little overwhelmed by the home buying process. We've also found that sometimes, this stress is overshadowed by buyers trying to gauge how much home they can afford.
So we built a calculator designed to help you:
Gauge how different home purchase prices, loan terms, interest rates, property taxes, and homeowners insurance premiums will impact your monthly payments
Understand how much home you can afford
Plan ahead for your mortgage payments
Citizens Bank can be a great option for doctors looking for flexible mortgage options to purchase a home. And while there are no 100% financing options, there are plenty of other perks to make the program a worthy contender.
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