AZ physician loan FAQ — 30+ questions answered
Mike Certo · Cornerstone First Mortgage · NMLS #260555 ·
Physician loans in Arizona let you buy with 0% down on homes up to $1.5 million, with no PMI, and your signed employment contract counts as proof of income — even if you haven't started yet. The questions below are what AZ physicians, dentists, and medical professionals actually ask Mike when considering this program. Organized by topic.
Eligibility questions
Who qualifies as a "physician" for these programs?
MDs, DOs, DDS, DMD, PharmD, DVM, DPM, certain psychiatry/ophthalmology specialties. CRNAs with DNAP/DNP also qualify under the Redwood Sequoia program. Medical residents + fellows with these degrees qualify with attending contract.
I'm a chiropractor — do I qualify?
No. Chiropractors are not eligible under most physician loan programs.
Do I need to currently practice medicine?
Yes, you need to be in active practice OR have a signed contract to start practicewithin 150 days of start (varies by program) (residents/fellows transitioning).
I'm an NP or PA — am I eligible?
Nurse Practitioners (NPs) and Physician Assistants (PAs) are eligible under some specialty programs but not the primary Redwood Sequoia program. We can discuss alternatives.
Can foreign nationals or DACA recipients qualify?
No. The Redwood Sequoia program requires US Citizens or Permanent Residents. Non-Permanent Residents capped at 95% LTV. No DACA, ITIN, asylum, or foreign nationals.
Loan structure questions
What's the maximum loan size?
$2,000,000 with full physician loan benefits.
Is 100% financing really available?
Yes, for borrowers with 720+ FICO up to $2M loan. 680-719 FICO gets 100% LTV up to $1.5M, or 95% LTV up to $2M.
Do I have to pay PMI?
No. One of the biggest advantages of physician loans — no PMI even at 100% LTV. Saves $200-$500/month vs traditional jumbo at low down payment.
What's the rate compared to conventional?
Physician loans typically run 0.125-0.375% above conventional jumbo rates. The savings from no PMI usually exceed this rate premium.
Can I use this for a second home or investment property?
No. Physician loans are primary residence only.
Can I get a physician loan for a manufactured home?
Generally no. Physician loans cover 1-unit detached or attached homes; manufactured homes have separate financing paths.
Income + DTI questions
I'm a resident making $65K/year — can I qualify for a $500K home?
Probably yes. The physician loan accepts your signed attending contract as future income. If you'll be earning $280K as attending starting in 6-12 months, that income qualifies you now.
How do you treat my student loans?
Most physician loan programs accept your actual IBR/PAYE monthly payment instead of the standard "1% of balance" rule. On a $250K student loan balance with $200/mo IBR, that's an enormous DTI difference.
What if my student loans are in deferment or forbearance?
Programs typically use the IBR-equivalent amount (often 0.5% of balance) for deferred loans, lower than the 1% standard. Some programs use $0 for fully deferred loans.
Will my high tax-deferred contributions hurt my qualification?
No — they don't reduce your qualifying income. Lenders use gross income before retirement contributions.
Can I include my spouse's income?
Yes if your spouse is also on the loan. Combined income can boost qualification significantly.
Resident + fellow questions
Can I buy a home during residency?
Yes. Physician loans specifically allow this. Most major AZ residency programs are at hospitals participating with multiple physician lenders.
What if I'm matching in March and want to buy by July (residency start)?
Common timing. Most physician loan programs accept your signed residency contract as employment verification. Apply in April-May, close in June-July.
Can I buy a home before I have a signed contract?
Generally no. You need a signed offer letter or employment contract for the lender to qualify the future income.
What if my residency program is at a non-traditional employer?
Most major AZ employers (Banner Health, Mayo Clinic, HonorHealth, Dignity Health, Tucson Medical Center, Banner UMC Tucson) are recognized. Smaller programs may need additional documentation.
What happens if my residency ends and I don't have an attending offer yet?
The physician loan stays in place. You're a homeowner. If your income drops temporarily, you'd need other resources (savings, working spouse, etc.) to cover the mortgage until you have an attending position.
AZ-specific questions
Which AZ employers have the strongest physician loan support?
- Mayo Clinic Phoenix + Scottsdale
- Banner Health system (Banner Phoenix, Banner UMC Tucson, others)
- HonorHealth (Scottsdale/north Valley)
- Dignity Health (Phoenix-area)
- Tucson Medical Center
- All have been verified for physician loan program eligibility
Do you serve Tucson + Phoenix equally?
Yes. Mike's branch works with physicians across Arizona — Phoenix metro is the largest segment but Tucson + Sierra Vista physicians also routinely use these programs.
Are AZ home prices supportable on physician loan income?
Yes. Average AZ attending physician income ($280K-$350K) supports premium Phoenix metro homes ($600K-$900K) comfortably. Specialists can support $1M-$2M with current programs.
What about Scottsdale or Paradise Valley physicians?
Physician jumbo loans work in these markets — up to $2M loan size at 100% financing.
Is the physician loan stackable with AZ DPA programs?
Generally no. Most AZ DPA programs (Home Plus, Home In Five Advantage, Pathway) are income-capped + designed for first-time buyers. Physician loans are typically alternatives, not stackable.
Process + closing questions
How long does a physician loan take to close?
Standard 30 days. Mike's branch typically closes 25-30 days.
What documentation do I need?
- Diploma/degree documentation
- Current employment contract or residency offer letter
- 2 years tax returns
- 2 months recent pay stubs (for current employment)
- 60 days bank statements
- Credit pull (after pre-qualification)
Will I need a manual underwrite?
The Redwood Sequoia program is manual underwrite only (no automated underwriting). Mike's team handles the manual file review process.
Are there closing cost limitations?
Standard closing costs apply. Some physician programs reduce or waive origination fees. Mike will provide a detailed Loan Estimate showing all costs.
Can I refinance later when my income changes?
Yes. Most physicians refinance at the resident-to-attending transition. Income increases dramatically (often 4-5x), and rates may have moved. Cash-out refi often makes sense at this transition.
Comparison questions
Physician loan vs FHA?
Physician loan wins almost always for eligible borrowers. Lower down + no PMI + higher loan limits + higher DTI tolerance.
Physician loan vs VA?
Veterans should compare both. VA with disability waiver eliminates funding fee. Physician loan beats VA on no-DTI-overlay flexibility. Both can finance $0 down. Run both quotes.
Physician loan vs conventional jumbo?
Physician loan wins if you have less than 20% to put down. Conventional jumbo wins if you have 20%+ down + want the lowest rate.
Should I work with a national physician lender or Cornerstone?
Both have valid choices. National lenders compete on brand + scale. Cornerstone competes on AZ-specific knowledge + direct LO access + AZ market familiarity. Most AZ physicians prefer the local relationship.
Does Cornerstone have multiple physician loan products?
Yes. Primary product is Redwood Sequoia. Backup product is Newfi Hercules for self-employed physicians whose tax returns don't reflect income capacity. Mike runs both quotes when appropriate.
Physician Loan vs. Conventional: Side-by-Side Dollar Example
An attending physician buys an $850,000 home in Scottsdale. Here's what the numbers look like under a physician loan versus a conventional 20% down mortgage.
| Item | Physician Loan | Conventional (20% down) |
|---|---|---|
| Purchase price | $850,000 | $850,000 |
| Down payment required | $0 | $170,000 |
| Monthly PMI | $0 | N/A (waived at 20% down) |
| PMI if only 5% down (conventional) | $0 | ~$425/month |
| Minimum FICO | 680 | 620–640 typical |
| Cash preserved at closing | $170,000 | $0 |
For illustrative purposes only. Actual loan terms, pricing, and qualification depend on full file review. Rates are not disclosed on this site.
Have a question not answered here? Contact Mike or call (480) 296-6513.