Physician loan or conventional: where each one wins
Program and regulatory figures verified October 5, 2026. Details change; confirm your scenario with us.
A physician loan is a specialised tool. Knowing when you do not need it is as useful as knowing when you do.
The comparison
| Physician programme | Conventional | |
|---|---|---|
| Rules set by | Lender portfolio guide | Fannie Mae / Freddie Mac |
| Down payment | Up to 100% financing; 5%-down options | Typically 3–20%+ |
| Monthly PMI | None | Generally required above 80% LTV |
| Loan ceiling | $2M | $832,750 / $1,249,125 conforming in CA |
| Student debt | Documented IDR payment | 1% of balance — B3-6-05 |
| Future income | Up to 150 days pre-start | 90 days — B3-3.3-03 |
Where the physician route wins
- Heavy training debt. The single biggest factor. $300,000 of balance is a $3,000 monthly phantom obligation on conventional.
- Little saved for a deposit. Up to 100% financing with no monthly PMI.
- Buying above the conforming limit — which in California is a typical purchase in Santa Clara and San Diego counties. The gap.
- Not yet earning. The 150-day window against 90.
Where conventional wins
More often than this category tends to admit.
- You have a deposit and modest debt. If the file clears conventionally at 20% down, there is no PMI to avoid and no reach problem to solve.
- You are buying under the limit in a baseline county. Sacramento's typical value of $574,820 is well inside $832,750.
- You want agency terms. A conventional loan is a standardised, portable product; a portfolio product is the lender's own.
Mike's read: the physician programme is a solution to specific problems — debt, deposit, reach, timing. If you do not have one of those problems, you do not need the specialised product, and saying so is part of the job.
The honest version of the trade
Taking 100% financing means starting with no equity. In a market that is rising, that is a timing advantage. In a flat one it means several years before a sale nets anything after costs, and it is worth going in with that understood rather than discovered.
California's major metros were all selling faster than the national benchmark as of 2026-08-31, which is a sign of demand rather than a guarantee of appreciation. Neither we nor anyone else can promise which way prices move. The current data.
And FHA?
Rarely the right answer for a physician with strong income, mostly because FHA counts 0.5% of a zero-payment student loan balance under HUD 4000.1 and carries its own mortgage insurance structure. It exists; it is seldom the best of the three here.
Frequently asked questions
Is a physician loan better than a conventional loan?
It depends on the problem. A physician programme wins on heavy student debt, a small deposit, buying above the conforming limit, or buying before income starts. Conventional wins when the file clears on its own terms, particularly under the conforming limit with a 20% deposit.How much can a conventional loan cover in California?
Conforming financing reaches $832,750 for a one-unit property in 41 of California's 58 counties and $1,249,125 in the ten high-cost counties. Above those figures a conventional loan is a jumbo loan.Does a physician loan have PMI?
The physician structure described here carries no monthly private mortgage insurance up to its $2 million ceiling. A conventional loan generally requires mortgage insurance above 80% loan-to-value.What is the downside of 100% physician financing?
Starting with no equity. In a flat market it can take several years before a sale nets anything after costs, so the decision should account for how long you expect to stay rather than assume appreciation.Mike Certo · NMLS #260555 · Cornerstone First Mortgage NMLS #173855 · Equal Housing Lender. Educational content, not a loan commitment and not legal, tax, or licensure advice. Physician-loan program terms, eligible degrees, and overlays are set by the lender and change; California loan-repayment program terms and application cycles change too. Confirm your scenario with us and your program administrator. All loans are subject to borrower and property qualification, including credit and income review.