BMO Harris offers doctor loans for primary residences, for purchase or refinance.
- 100% financing up to $1MM for training or attending
- 95% financing up to $1.5MM for training or attending
- 90% financing up to $2MM
Melissa BrockLast Updated February 17, 2022
Read Time7 mins
California Physician Mortgage Loans in 2022
Physician mortgage loans were created to meet the unique financial needs of medical professionals who have limited savings, limited income history and lots of debt.
With a population of almost 40 million people, California is a top destination for physicians. Living there, however, does come with a price.
According to Zillow, the typical home value in California is $745,200, a seasonally adjusted figure that only includes the middle price tier of homes. As a dentist, surgeon or veterinarian, how will you finance your home?
In this article, we'll review why physicians move to California, the best mortgage lenders for doctors in the Golden State and everything in between.
Let's get started.
With a population of almost 40 million people, California is a top destination for physicians. Living there, however, does come with a price.
According to Zillow, the typical home value in California is $745,200, a seasonally adjusted figure that only includes the middle price tier of homes. As a dentist, surgeon or veterinarian, how will you finance your home?
In this article, we'll review why physicians move to California, the best mortgage lenders for doctors in the Golden State and everything in between.
Let's get started.
Why should physicians move to California? Despite the high cost of living and high state taxes, there are plenty of reasons why doctors may want to land in California after medical school.
One compelling reason: California has a shortage of primary care physicians, especially in rural areas and low-income inner city areas.
Due to the number of residency programs, it's natural that California residents may decide they'd just like to stay for the top hospitals, diverse culture and great weather. You can find just about any terrain or climate to fit your needs, from coasts to mountains, valleys and deserts.
According to the American Medical Association Residency and Fellowship database, the 15 most-viewed medical residency programs in California are as follows:
- UCSF
- Cedars-Sinai Medical Center
- Kern Medical Center
- St. Mary Medical Center
- Arrowhead Regional Medical Center Program
- Loma Linda University Health Education Consortium
- UCLA: LAC+USC Medical Center
- Scripps Clinic/ Scripps Green Hospital
- University of California (Irvine)
- Kaiser Permanente Southern California
- OPTI West/West Anaheim Medical Center Program
- San Joaquin General Hospital Program
- UCLA David Geffen School of Medicine
- Santa Barbara Cottage Hospital
- Alameda Health System-Highland Hospital
First of all, what is a physician mortgage loan?
Physician mortgage loans help doctors buy homes with certain perks not available for the general public, such as zero down payments, no mortgage insurance options and looser qualifying requirements. Physician mortgages are designed for doctors whose college debt and limited savings may give them a harder time qualifying for a typical mortgage.
LeverageRx will connect you with lenders that specialize in physician loans in the state of California. Not every lender offers their doctor loan program in every state, and some lenders offer doctor loans to only specific designations. Since it can be a hassle figuring out which lender will accept your application, some residents and doctors opt for a conventional loan instead.
Don't do that! The perks of a doctor loan are far worth the trouble of pursuing. The next section will outline exactly why.
In this section we want to list our lenders in California and highlight their program requirements and loan terms.
U.S. Bank
U.S. Bank offers fixed loans, ARMs and is available nationwide, including California. The program is available whether you are six months away from completing your residency or have been practicing for decades. However, loans require 10% down up to $1.25MM and only MDs and DOs are eligible.
Learn More: U.S. Bank Physician Loan Review
Huntington Bank
Once Huntington merged with TCF, it expanded its footprint to include California. Available to MDs, DOs, DDS, DMD, DPM and DVMs, Huntington's physician mortgages provide 100% financing up to $1MM. What is better than putting zero down?!
Learn More: Huntington Bank Doctor Loan Review
PNC Bank
PNC offers physician mortgages to MDs, DOs, DDS and DMDs. The program is available in 27 states including California. Whether you are still in school or already attending, PNC offers 95% financing up to $1MM.
Learn More: PNC Physician Loan Review
West Coast Mortgage Group
With offices in Sacramento, San Diego and Carson City, West Coast Mortgage's doctor loan program is available to MDs, DMDs, DOs, DPMs, DCs, ODs, DPMs, RPHs and PharmDs. Residents and attendings can get 95% financing up to $850k.
Guaranteed Rate
Guaranteed Rate announced their physician mortgage program in January 2022 and included California in their offering. Designations eligible are DC, DMD, DDS, MD, OD, DO, DPM, DCH, DVM, and RPH. Like so many other physician loans, Guaranteed Rate offers 100% financing up to $1MM.
Truist
Truist, formerly known as SunTrust, has been in the physician mortgage game for a long time. The program features a range of fixed and adjustable-rate mortgages with up to 100% financing (up to $750K). Designations include MD, DO, DPM, DDS, and DMD.
Learn More: Truist Physician Loan Review
Northpointe Bank
Northpointe Bank offers one of the most generous doctor home loan programs out there. Residents and attendings alike can get 100% financing up to $1MM. Looking to buy a $5MM home? No problem, Northpointe Bank only requires 10% down. In addition, your purchase can be for a primary, secondary or investment property.
Let's take a look at a few costs of physician mortgage loans in California.
Down payment: For most folks, this is a serious cost. For residents and physicians, most lenders offer 0% down.
Closing costs: Closing costs typically include application fees, attorney fees, courier fees, discount points, homeowners association (HOA) transfer fees, loan origination fees, appraisal fees, title searches, title insurance, taxes, deed recording fees and credit report fees. This particular cost is one worth comparing since some doctor loan programs reduce closing costs to almost nothing.
Home inspection: A home inspection is a thorough examination of a home to find issues with it, such as damage to certain parts of your home.
Earnest money: In a state like California, this may be necessary. Also called a "good faith deposit," earnest money refers to money you put down before closing to show a seller you are serious about buying the house.
Escrow fees: An escrow account is a third-party account that holds money until a certain condition is met during the sale process and sometimes after the sale process.
Mortgage insurance: Again, for most folks this is a cost to save up for. For physicians? Not one doctor loan program on LeverageRx requires PMI.
Homeowners insurance: Homeowners insurance covers damage to your home caused by fires or storms and also if someone becomes injured on your property and sues you for it.
Taxes: Yikes -- in California, you can bet you will pay a lot in property taxes. This is definitely a cost to save up for before buying a home.
Real estate commission: The commission is usually split equally between the buyer's and seller's agents. If the buyer purchases the home without representation, the full commission is paid to the seller's agent, unless different arrangements have been made.
In all 50 states, you must pay property taxes based on the assessed value, plus annual reassessments based on inflation. Some Californians also pay Mello-Roos taxes in order to fund improvements to local infrastructure under the Community Facilities Act. They build or upkeep streets, schools, sanitation systems, police protection and more.
Properties that exist within the Mello-Roos Community Facilities District receive this tax. It's a good idea to find out about the amount of the expected special tax payments.
If you are over 55, disabled, or a victim of a natural disaster, Proposition 19 allows you to transfer existing property tax assessed value under Proposition 13 to a replacement home. It also limits the existing property tax benefits for certain real estate transfers between family members, such as the transfer of property from a parent to a child following the death of the parent. It also expands property tax benefits for family farm transfers and allocates net state revenues and savings to wildfire response.
In California, the tax year runs from July 1 through June 30. You must pay your property tax bill in two installments — the first payment by December 10 and the second payment by April 10. You must pay a 10% penalty for overdue bills plus a 1.5% per month redemption fee. If you don't pay over the course of five years, tax collectors can legally sell the property to collect on taxes and penalties.
Before you decide on a physician home loan in California, consider a couple things. For example, California's housing market is the most valuable in the country with a total of $9.24 trillion as of December 2021, over 20% of the national total, according to Norada.
As housing costs continue to rise, only 24% of home buyers could afford to buy a median-priced home in California in the third quarter of 2021. A median-priced existing single-family home would require a minimum annual income of $148,400.
All but two counties in California saw a rise in their median prices year over year. Thirty-nine of them increased by double digits year over year. The demand for homes continues to drive up the cost of real estate prices. All areas gained at least 14%, according to Norada. The San Francisco Bay area increased the most, at 23.8%, and the Central Coast had the smallest increase, at just over 14%.
The cheapest counties to live in include Modoc County, Lassen County, Siskiyou County, Colusa County and Sierra County, according to California.com. The most expensive counties in California include San Mateo County, San Francisco County, Marin County and Santa Clara County.