Physician loan vs FHA vs VA — full comparison for AZ doctors
Mike Certo · Cornerstone First Mortgage · NMLS #260555
AZ physicians, dentists, and medical professionals have access to multiple loan programs. Each fits different scenarios. Here's the side-by-side comparison.
Quick comparison
| Feature | Physician Loan | FHA | VA | Conventional Jumbo |
|---|---|---|---|---|
| Down payment | $0 | 3.5% | $0 | 10-20% |
| Upfront fee | None | 1.75% UFMIP | 2.15% funding fee (waived for VA-exempt borrowers per VA exemption categories) | None |
| Monthly mortgage insurance | NONE | 0.55% lifetime | NONE | NONE |
| Min FICO | 680-720 | 580 | 580-620 lender overlay | 720+ |
| Max loan | $2M | $498K-$562K AZ | $832,750 baseline (jumbo with full entitlement) | $5M+ |
| Income flexibility for residents | YES (uses attending contract) | NO | NO | NO |
| Student loan IBR handling | Actual IBR payment | 0.5% of balance | IBR for VA / 1% Fannie | 1% balance default |
| DTI max | 50% | 56% with comp factors | 41% (more with residual income) | 43-45% |
When physician loan wins for AZ doctors
Resident or fellow buying first home
Physician loan is the only option that accepts future attending income for qualification. Conventional + FHA + VA all use current resident income.
High student loan balance ($150K+)
Physician loan uses your actual IBR payment instead of 1% of balance. On $250K student loans, this can be the difference between qualifying for $400K vs $700K home.
$0 down + want to keep cash for practice startup + investments
$0 down + no PMI lets you preserve cash. New attendings often have student loans + practice startup costs to manage.
Buying above $832K + jumbo competitiveness
Physician loan up to $2M with $0 down. Conventional jumbo requires 10-20% down. For Scottsdale + Paradise Valley physician purchases, physician loan typically wins.
Strong credit (720+) with limited down payment savings
Physician loan optimizes for this exact profile.
When FHA wins (if you qualify)
Rarely better than physician loan. FHA's main advantages are: - Lower credit minimum (580 vs 680-720) - Higher DTI tolerance (up to 56% with compensating factors)
For physicians with stable income + good credit, physician loan beats FHA almost always.
When VA wins (if you qualify)
For veterans with VA eligibility: - No funding fee with 10%+ disability rating - Comparable $0 down - Lower rates typically (0.125-0.375%) - No DTI overlay restrictions
If you're a physician + veteran with disability rating, VA usually wins. Run both quotes.
For non-disabled veteran physicians, it's closer — physician loan's DTI flexibility for residents often beats VA's residual income test.
When conventional jumbo wins
For physicians with: - 740+ FICO - 20%+ savings available for down payment - Strong income established (post-residency, attending 2+ years) - Want absolute lowest rate
Conventional jumbo rate may be 0.125-0.375% below physician loan rate. Combined with 20% down, total monthly cost can be lower over 30 years.
For physicians who can't or won't put 20% down, physician loan beats conventional jumbo.
Real example — AZ resident at Banner Phoenix
3rd year resident, $72K/year, $230K student loans on IBR ($150/mo), buying $565K Litchfield Park home.
FHA scenario
- DTI math: $200/mo student loans (0.5% rule) + $3,800 estimated PITI = $4,000 monthly debt
- Required income: ~$10,400/month = $125K/year
- Resident makes $72K. Doesn't qualify.
VA scenario (if veteran)
- DTI math: $150/mo student loans (IBR) + $3,750 PITI = $3,900 monthly
- Need attending contract for future income qualification — VA doesn't accept this
- Doesn't qualify in residency
Physician loan scenario
- DTI math: $150/mo student loans (IBR) + $3,800 PITI = $3,950 monthly debt
- Uses signed attending contract ($295K) as qualifying income
- DTI = 16% on attending income
- Qualifies easily.
Physician loan wins decisively.
Real example — AZ attending physician (5 years post-residency)
35-year-old attending, $385K/year, no student loans remaining, 740 FICO, $80K savings, buying $675K Phoenix home.
Conventional jumbo (10% down)
- Down: $67,500
- Loan: $607,500
- Rate: 6.625%
- Monthly P&I: $3,887
- No PMI (10% down)
- Cash remaining: $12,500
Physician loan ($0 down)
- Down: $0
- Loan: $675,000
- Rate: 6.75% (slightly higher)
- Monthly P&I: $4,376
- No PMI
- Cash preserved: $80,000
Physician loan costs $489/month more but preserves $67,500 in cash. If that cash is needed for practice startup or earns more than mortgage interest, physician loan wins.
Conventional jumbo wins on pure monthly cost.
How Mike helps AZ physicians decide
- Run physician loan vs FHA vs VA vs conventional scenarios for your specific numbers
- Show APR + total cost, not just headline rate
- Factor in your specific cash position + student loan situation
- Recommend the right path for YOUR scenario, not the lender's quota
Free consultation or call (480) 296-6513.