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  • Writer's pictureNathan Zarcaro

Physician Loans for Florida Home Buyers - 3 Things Experts Won't Say


Physician mortgage loans can be gamechangers for doctors and other qualified professionals looking to buy a home early in their careers. This is true across the country, but especially in Florida, where there are seemingly endless options for buyers to consider.


Here is everything you need to know about physician loans in Florida, including three things that experts seemingly never talk about.



What is a physician loan?


A physician loan is a special type of home loan that is offered uniquely to physicians, dentists, and other healthcare professionals. Exactly which professions qualify depend on each specific lender's offers, and some lenders also offer professional mortgages to accountants, lawyers, and other high-income individuals.


These physician and professional mortgage programs oftentimes carry a number of different features:


  1. Flexible financing options

  2. Private mortgage insurance (PMI) waivers

  3. Relaxed underwriting criteria

  4. Fast approval and closing



Pros of FL physician loans


Physician loans in Florida carry more benefits than they do in other states across the country.


For one, doctors in and around Florida's largest cities can use these home loans to access desirable housing in expensive areas like Miami, Orlando, and Tampa.


Additionally, some programs across Florida extend financing options to handle home improvement projects that make a home more hurricane resistant.


Another pro to doctor home loans in The Sunshine State lies within Florida's zero state income tax. This lack of tax makes low down payment options like physician mortgages perfect, since physicians will have the extra cash flow that may be necessary to support these higher mortgage payments.



Physician mortgage lenders in Florida


There is certainly no shortage of lenders offering physician loans. Our favorites for 2023 and 2024 are:


  1. First Horizon Bank

  2. Fifth Third Bank

  3. First National Bank

  4. TD Bank



1. First Horizon Bank


First on our list is First Horizon Bank. Their program is open to MDs, DOs, OMSs, and DPMs only, so the program is a little more restrictive than others further down this list.


Buyers have a number of financing options to choose from, including:


  • 100% financing up to $1.5 million

  • 95% financing up to $2 million

  • 90% financing up to $2.5 million


Interestingly, First Horizon also offers H-1B visa loans for non-citizens too, complete with 100% financing.


Other requirements and features to participate include:


  • A minimum credit score of 670

  • No PMI requirement

  • The ability to close up to 90 days before starting your career



2. Fifth Third Bank


Fifth Third Bank, out of Cincinnati, Ohio, is active in the Florida real estate market as a lender. They offer home loans to:


  • Residents

  • Fellows

  • Physicians

  • Dentists

  • Podiatrists

  • Veterinarians

  • Optometrists


Fifth Third does offer a no down payment option, up to $750,000.


They do extend loans to established doctors and dentists (employed for at least 12 months) up to $2 million, though this much financing will require a 10% down payment.



3. First National Bank


First National Bank is another good option. Though the bank does not have any brick-and-mortar branches in Florida, the bank still underwrites mortgages in the state.


Their official doctor loan program is open to MDs, DOs, dentists, veterinarians, and podiatrists, so long as they are less than 10 years removed from training.


Participants can buy a home up to $1.25 million with no money down, $1.5 million with 5% down, and $2 million with 10% down.


First National also offers a unique selection of loans under the program:


  • 15-year fixed

  • 30-year fixed

  • 5-year ARM

  • 7-year ARM

  • 10-year ARM

  • 15-year ARM



4. TD Bank


TD Bank offers another great doctor loan program for Floridians. Florida buyers with MD, DO, DPM, DDS, or DMD degrees may qualify for:


  • 100% financing up to $1 million

  • 95% financing up to $1.5 million

  • 89.99% financing up to $2 million


TD Bank currently offers those in the program the choice between 30-year fixed and various adjustable rate options.


 

These four lenders may be some of our favorite current physician mortgage programs in Florida, but there are also so many viable options, including:


  • U.S. Bank

  • Truist

  • NEO Home Loans

  • BMO Bank



3 things experts don't say about physician mortgages


Given all the demand for physician mortgages, it is important to acknowledge three things that experts seemingly never talked about:


  • It is easy to buy too much house

  • The risk of negative equity

  • Improved quality of life



1. It is easy to buy too much home


In competitive and pricy real estate markets, like that in Florida, the ability to quickly apply for and receive more home financing than you'd qualify for via a Conventional loan makes it possible to buy more home than you really need.


If you're planning to own your house for a while and are sure that your income will grow, it may not be a mistake. But having this extra financing available to you could lead you to buy a home you don't really need.


This could put you at a disadvantage when it comes to achieving your other financial goals, like getting married, starting a family, paying off student loan debt, and saving for retirement.



2. The risk of negative equity


Given the low-down payment requirements, it is entirely possible that you could find yourself underwater on your mortgage if the real estate market turns sideways. This will happen if you owe more money on your home than your home is worth.


This is not a risk unique to physician mortgages, though any down payment can help lessen this risk.


Being underwater is not the end of the world, but you may find that it makes it challenging (or impossible) to sell or refinance in the meantime.



3. Improved quality of life


After my two warnings, it is important to acknowledge something else. Doctor home loans can make your dreams come true! Too often, they're just colloquially mentioned as a way to make the home buying process easier.


But if you're in the early stages of a high paying career as a healthcare professional, a physician loan can help you buy a home near the beach or ocean or explore high income areas like Naples or Jupiter that may otherwise have been inaccessible.



Is a Florida physician mortgage for you?


Ultimately, whether or not you should pursue a doctor loan in Florida depends on a number of variables. The biggest three, though, are:


  • Where you're looking to buy a home

  • How much student loan debt you have

  • If you're buying a primary residence



1. Where you want to buy a home


We've already touched upon this a bit, but the location of your prospective home will play a large role in your mortgage needs.


Buyers in central Florida or the panhandle in particular may not need a physician loan, given the lower average real estate costs than other areas of the state.


However, buyers working on either the Atlantic Ocean or Gulf of Mexico coasts may benefit from the additional financing. In late 2023, some of the most competitive local real estate markets in Florida are Cape Coral/Fort Myers, Jacksonville, Naples, Miami metropolitan area, and other cities up and down the coasts.



2. How much student loan debt you have


Your student loan balance could make this decision for you. Borrowers well into the six-digit range may find that physician mortgages are their only real reason, as their debt-to-income ratios could prohibit them from using a Conventional mortgage program.


If you're willing to buy a home even with this debt, presumably because of your future income, a physician loan is likely to be a good option.



3. Whether you're buying a primary residence


Most, if not all, physician loan programs are available to buyers looking to buy a primary residence only.


This means that you cannot use these programs for investment properties, vacation homes, or flips.



How are physician mortgages different?


Physician loans are different than Conventional loans in a number of ways.


First, the flexible financing options mean that you can buy a home with little or no money down, as we've seen already.


Next, even with low or no money down, qualified buyers are likely to bypass PMI, which can easily save up to $100 per month - or maybe even more!


You'll also benefit from a more relaxed underwriting and approval process, which can be hugely beneficial and help you avoid any undue stress,



Conclusion


Physician mortgages can be an excellent option for those looking for relaxed approval guidelines and extra financing, as long as they understand the power and potential pros and cons of such programs.


Would you consider a physician loan for your Florida home purchase? Tell me why or why not in the comments below!



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About Nathan Zarcaro

Nathan Zarcaro is the founder of The Student Debt Destroyer and is passionate about personal finance related causes.  A 2018 graduate of Providence College's Liberal Arts Honors Program, Nathan studied Finance, and has worked for industry leaders in both finance and healthcare.  In his free time, Nathan enjoys playing golf and traveling with his wife Brigid.

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