You worked hard to earn your white coat. Now you are looking at homes in Ann Arbor and wondering how to qualify with student loans, a residency or fellowship schedule, and a start date that is still a few months out. Physician mortgages can open doors, but the details matter. In this guide, you’ll learn how doctor loans typically treat student debt, future income, and PMI so you can shop with confidence in Washtenaw County. Let’s dive in.
Physician mortgages, in plain English
Physician mortgages are lender-created programs designed for medical professionals. They are not a single government program. Banks, credit unions, and mortgage companies offer them with features that can help buyers in training or early career.
Common benefits include low or no down payment, more flexible debt-to-income rules, and the option to qualify using an executed employment contract that shows your attending salary. Many programs also advertise no monthly PMI. Because programs vary by lender, always compare the annual percentage rate and the full cost of each offer.
Keep in mind that these loans can sometimes come with higher rates or fees compared with a standard conforming loan. They are usually conventional, private-label loans. FHA, VA, or USDA loans follow different rules and might be a better fit for some borrowers depending on credit, down payment, and goals.
Student loans and your buying power
Student debt is often the biggest factor in your qualifying ratios. Lenders use different methods to turn your education debt into a monthly payment for underwriting.
How lenders count student loans
- Actual payment shown on your statement. If you are on a standard plan, many lenders simply count that number.
- Income-driven repayment (IDR) treatment. Some lenders count the actual IDR payment. Others use a percentage of your outstanding balance, often 0.5 to 1.0 percent per month, especially if your scheduled payment is $0 or varies.
- Deferment or forbearance. If your federal loans show a $0 payment, many lenders substitute a calculated payment based on a percentage of the balance. Private loans typically require the contractual payment to be counted.
Why physician programs may help
Some physician-focused lenders use borrower-friendly rules. They may accept your actual IDR payment, even if it is low. Others may qualify you using your signed attending contract, which can offset the impact of current student loan payments. Policies vary, and more flexible treatment can come with a higher rate or fee.
Documents you will need
- Recent student loan statements for each account with balance, status, and payment amount.
- If on IDR, proof of the plan and monthly payment from your loan servicer.
- If in deferment or forbearance, written confirmation from the servicer.
- Any consolidation history or documentation that explains changes to payment amounts.
Tip: Ask for a written pre-approval that shows exactly how the lender counted your student loans. That clarity prevents surprises once you are under contract.
Qualifying with employment contracts
Physician programs commonly allow you to qualify using your employment contract. The details depend on your stage and the contract language.
Residents and fellows
If you are still in training, lenders can qualify you using your current stipend with W-2s and paystubs. Some programs also allow stable moonlighting income when it is well documented. If you have a signed attending contract, certain physician programs will underwrite to that future salary, subject to timing and documentation.
Using a future attending salary
Many physician lenders will accept a fully executed employment contract to qualify you at the attending salary before you start the job. Expect to provide the contract with start date and compensation, and be ready to show that you will begin work within the lender’s allowed timeframe after closing. Some lenders also want proof of licensure or that licensing is on track by the start date.
Newly hired attendings
If you are starting as an attending now, underwriting is often straightforward with a signed contract and, if available, early paystubs. Be prepared to document any sign-on bonus, relocation allowance, or loan repayment assistance noted in the contract.
Other income considerations
Lenders treat sign-on bonuses, relocation funds, and moonlighting income differently. Many require these funds to be received and documented before counting them toward reserves. If your schedule is part-time or variable, expect to show a consistent history before that income is used to qualify.
No-PMI claims explained
PMI is usually required when you put less than 20 percent down on a conventional loan. Physician mortgages often advertise no PMI, but the way they achieve this can affect your total cost.
Common PMI alternatives
- PMI waiver. Some lenders waive monthly PMI up to a certain loan-to-value level. In exchange, the interest rate or fees may be higher.
- Lender-paid mortgage insurance. The lender covers the MI premium and charges a higher rate. This is rolled into your interest cost and usually cannot be canceled without refinancing.
- Upfront fee options. Some programs use higher origination points or fees to remove monthly PMI.
Trade-offs to compare
Lender-paid MI and PMI waivers can raise your rate compared with a standard loan with borrower-paid PMI. Borrower-paid PMI can be canceled once you reach required equity, while lender-paid structures generally cannot. If you plan to live in the home only a few years, a lower upfront cost could matter more. If you plan to stay longer, a lower rate without embedded MI can save more over time.
How to evaluate offers
Ask each lender for an itemized comparison that shows rate, monthly principal and interest, any PMI or lender-paid MI structure, lender fees, and estimated costs over different time horizons. Compare the APRs and the lifetime cost based on how long you expect to hold the loan.
Ann Arbor factors that influence your loan choice
Ann Arbor and Washtenaw County tend to run above statewide medians due to steady demand tied to the University of Michigan, U-M Health System, research institutions, and nearby clinics. Homes near the medical complex and central campus see strong competition and limited inventory, which makes speed and clean financing important.
Timing around the academic year
Many residents and fellows relocate in July. That makes late spring and early summer competitive. If you plan to qualify using a future attending contract, get a pre-approval that explicitly confirms the lender will accept your contract and the expected start date.
Proximity and your monthly budget
Living close to the hospital or campus can reduce commute time, which matters when you have long shifts. That convenience can come with higher list prices or association fees. Some properties include parking fees or special assessments that count toward your monthly housing cost, so share those details with your lender early.
Condos, townhomes, and small multis
If you are eyeing a condo near campus, ask about project approval requirements like budget reserves or owner-occupancy levels. Some physician programs have stricter condo rules than standard conventional loans. If you are considering a duplex or a property you might rent later, know that many physician programs limit investment properties, so clarify eligibility before you shop.
Local lender familiarity
Lenders and brokers who regularly work with U-M trainees can help you align contract dates, closing timelines, and documentation. Local credit unions and community banks may also offer competitive physician-friendly terms, especially for university employees. Compare at least two or three written quotes.
Your physician-buyer checklist
Use this quick list to get organized and save time when the right Ann Arbor home hits the market.
Documents to prepare
- Executed employment contract with start date and salary; residency or fellowship contract if still in training.
- Recent paystubs, W-2s, and the most recent tax return if applicable.
- Student loan statements for each account, plus IDR approvals or deferment letters.
- Documentation for sign-on bonuses, relocation allowance, or loan repayment assistance.
- Bank and investment statements for assets and reserves.
- Government ID and proof of current address.
- For condos, any HOA documents or manager contacts you can gather.
Smart questions to ask lenders
- Do you offer a physician or doctor mortgage? What down payment and maximum LTV qualify for no PMI?
- How do you count student loans if I am on IDR, deferment, or forbearance? Do you use actual payment or a percentage of the balance?
- Will you accept my signed employment contract to qualify at the attending salary? What conditions must be met and by when?
- Can stable moonlighting income be counted? How is bonus or relocation money treated?
- If there is no monthly PMI, is it lender-paid mortgage insurance, a higher rate, or an upfront fee?
- Are there condo or property-type restrictions for your program? What about small multi-unit homes?
- What timeline do you need to underwrite and close when using future income?
- Will your pre-approval letter state how my student loans were treated and that my contract is accepted?
Your shopping strategy
- Get multiple written pre-approvals that spell out student loan treatment and whether your contract is accepted. Verbal approvals are not enough.
- Compare total cost, not just the down payment. Review APR, rate, lender fees, PMI or lender-paid MI, and monthly payment.
- Decide how long you expect to stay. Shorter horizons may favor lower upfront costs. Longer horizons may favor lower rates and cancellable PMI structures.
- Coordinate your closing with GME schedules and your contract start date so your financing lines up with move-in.
Next steps
- Gather the documents above and request written physician-loan pre-approvals from at least two lenders.
- Ask for side-by-side cost comparisons that include rate, fees, and MI structure.
- If you are targeting condos or properties near campus, confirm any project or HOA restrictions early.
- Partner with a local agent who understands physician timelines, Ann Arbor neighborhoods, and competitive offer strategy.
Ready to explore properties that fit your schedule and your financing plan? Schedule a strategy call with the Anthony Maisano Real Estate Group. We will help you line up a physician-friendly pre-approval, focus your search near U-M medical facilities if you prefer, and move fast when the right home hits the market.
FAQs
Can residents buy in Ann Arbor before finishing training?
- Yes. Many lenders qualify residents using current stipend income, and some physician programs allow you to qualify using a signed attending contract. Requirements vary by lender and contract terms.
How do IDR payments affect mortgage qualification for doctors?
- Lenders vary. Some count your actual IDR payment, which can help, while others use a percentage of your student loan balance. Physician-friendly lenders may use more favorable calculations, so ask for written treatment.
Do physician mortgages always eliminate PMI?
- Not always. Some waive monthly PMI but increase the interest rate or use lender-paid mortgage insurance. Compare the total cost, including APR and how long you plan to hold the loan.
Can I use a signed attending contract to qualify before my start date?
- Often yes. Lenders usually want a fully executed contract with a start date and salary, and they may require you to start within a set timeframe after closing. Some also require proof of licensure by start.
Are condos near U-M harder to finance with a doctor loan?
- They can be. Some physician programs have stricter condo project requirements. Check approval criteria, reserves, and owner-occupancy levels with your lender early in the search.
