Home Loans for Nurses | Mortgage Programs 2024

What are the best mortgages for nurses?

Home loans for nurses come in various forms, specifically designed to cater to the unique needs of healthcare workers.

Beyond these specialized mortgage options, numerous local and national assistance programs can also offer financial help — like with down payments and closing costs.

However, just because you’re a nurse doesn’t mean a specialized “nurse home loan” is best. You might find you can buy a home more easily with a standard mortgage program. So do your research and choose carefully.

In this article (Skip to...)

• Nurse home loans
• Grants for nurses
• Eligibility requirements
• Home buying challenges
• Choosing a loan
• FAQ

Understanding home loans for nurses

For nurses, the journey to homeownership isn’t just about finding the right house—it’s about unlocking doors to financial opportunities tailored specifically for healthcare heroes.

What are home loans for nurses?

Home loans for nurses are specialized mortgage programs designed to help healthcare professionals, particularly registered nurses, achieve homeownership. These loan programs often come with unique benefits tailored to the specific needs and challenges faced by nurses in the home-buying process.

Home loans for nurses can include various loan types, such as FHA loans, VA loans, conventional loans, and even specific programs like the Nurse Next Door initiative. These loans aim to make the dream of owning a new home more accessible for those in the nursing profession.

Additionally, there are also grants for nurses buying a home, as well as various local and national assistance programs that provide financial aid. These can be particularly helpful in covering down payments and closing costs, making the home-buying process more accessible, especially for nurses who are first-time home buyers.

Why nurses get special home loan programs

Nurses get special mortgages because these programs are designed to address their unique financial situations. Unlike traditional mortgages, home loans for nurses take into account the employment instability often faced by nurses and their potential for long-term income growth.

Nurse home-buying programs may also partner with hospitals and healthcare organizations to streamline the employment verification process and offer favorable terms, such as reduced documentation requirements. These tailored financing options make it easier for nurses to secure home loans that fit their specific needs.

Benefits of home loans for nurses

Home financing for nurses often come with several advantages:

• Lower down payment requirements: Many nurse mortgage programs offer reduced down payment options, sometimes as low as 0% to 3% of the purchase price.
• Competitive interest rates: Nurses may qualify for lower interest rates compared to standard mortgage offerings.
• Flexible credit score requirements: Some home loans for nurses may have more lenient credit score criteria, understanding that medical professionals might have faced financial challenges due to education costs.
• Down payment assistance: Home financing for nurses often comes with grants or forgivable loans to help with the down payment and closing costs.
• Reduced or waived mortgage insurance: Some nurse loans may offer to reduce or eliminate mortgage insurance, potentially saving nurses thousands over the life of the loan.
• Special considerations for student loans: Certain mortgages for nurses may have more favorable policies for calculating debt-to-income ratio when factoring in student loan debt.

6 best home loans for nurses

When looking for the best home loan programs for nurses, it’s worth considering a mix of both specialized and standard loan options.

We recommend six mortgage programs in total—two are specialized home loans for nurses, while the other four are standard loan programs open to almost anyone. Surprisingly, you may find that a mainstream mortgage program, rather than a nurse-specific one, ends up being your best fit.

To give a quick overview, the six best home loans for nurses are:

1. Nurse Next Door program
2. Homes for Heroes
3. Conventional mortgages
4. FHA mortgages
5. VA mortgages
6. USDA mortgages

Let’s dig into each home buying program in a little more detail.

1. Nurse Next Door program

The Nurse Next Door¹ program is not a “true” mortgage loan program. It does not lend money or underwrite loans. Rather, it’s a home buyer assistance program that will help match you with the right property, mortgage, and aid program for your needs (if required).

Nurse Next Door provides grants for nurses of up to $8,000 (where available) and down payment assistance of up to $10,681. You may also reduce closing costs by eliminating a home appraisal and other fees.

Keep in mind that grants are generally only awarded to nurses and medical professionals who are first-time buyers purchasing a primary residence. This means that you must refrain from using the funds for an investment property or vacation home.

Before you use this nurse home buying program, check that you can’t get more generous grants or loans from your state or local down payment assistance program.

2. Homes for Heroes: Healthcare professionals

Homes for Heroes² is another nationwide homeowner assistance program that aims to make buying a new home more affordable for firefighters, law enforcement, teachers, military, and medical professionals.

The website says, “Most heroes save at least $3,000 when they buy or sell a home with us. When you add up savings from real estate agents, loan officers, title companies, home inspectors, and other everyday deals, the savings are way beyond what you’ll get from other national programs.”

Note that you must use real estate professionals approved by Homes for Heroes. Again, check other local programs to ensure this is your best option before buying.

3. Conventional loans for nurses

Conventional mortgages are the most popular type of home loans for nurses available today. These loans are not backed by the government, like others on this list, but most conform to the rules laid down by Fannie Mae and Freddie Mac, which are two government-sponsored enterprises. This is why they’re also referred to as “conforming loans.”

Conventional loans require a credit score of 620 or better. But they offer a low down payment option of only 3% of the purchase price to qualify. Although, if your down payment is less than 20%, you’ll need to pay for private mortgage insurance (PMI), which means higher monthly payments.

Conventional loans offer two primary types of interest rates: fixed-rate and adjustable-rate mortgages.

• Fixed-rate mortgages (FRM) keep the same interest rate throughout the duration of the loan, offering stability and predictability in monthly payments.
• Adjustable-rate mortgages (ARM) start with a lower interest rate that may change periodically based on market trends. This can initially lead to lower monthly payments, but it also carries the risk of increasing rates and payments over time.

Despite the specialized benefits of nurse home loans, conventional loans can often present the most advantageous home purchase solution for healthcare professionals.

4. FHA loans for nurses

Nurses and medical professionals with a credit score between 580 and 620 could opt for a mortgage backed by the Federal Housing Administration, an FHA loan. This type of loan is popular with first-time home buyers because of its flexible approval guidelines.

FHA loans also have a low down payment option of 3.5%. But you will have to pay mortgage insurance premiums (MIP) for the life of the loan. Note that MIP is different from private mortgage insurance on a conventional loan. Still, many FHA buyers simply refinance out of mortgage insurance down the road when their credit scores improve.

5. VA loans for nurses

Among the various home loans for nurses, VA loans offer unique benefits to eligible home buyers. Backed by the Department of Veterans Affairs, a VA loan is an option for nurses who have served or are still serving in the military.

Lenders set their own credit score thresholds, usually between 580 and 660. But you do not need a down payment. And you’ll be in line for a below-market interest rate, no private mortgage insurance, and low closing costs.

VA buyers must pay a one-time VA funding fee that is typically between 2.3% and 3.6% of the loan amount. However, many borrowers roll this fee into their loan balance, so they don’t have to pay it upfront.

6. USDA loans for nurses

The US Department of Agriculture backs USDA mortgages. These, too, require no down payment. But you’ll likely need a score of 640 or better. Similar to the VA loan, a USDA mortgage frequently has lower interest rates than the “going” rate.

You must also meet household income limits and buy a home in a designated rural area. Some suburbs are included. Use the USDA’s maps to find out whether the place where you want to buy is eligible.

Grants for nurses buying a home

While specific grants for nurses are not as common as other home loan programs, various nurse grants and down payment assistance options can significantly ease the path to homeownership for healthcare professionals.

First-time home buyer programs, local initiatives, and certain nurse-specific grants may offer valuable support in managing closing costs and down payment requirements. To find one that covers the area where you want to buy, read this article or check out your state’s page on the Department of Housing and Urban Development (HUD) website.

Everyday Hero Housing Assistance Fund

The Everyday Hero Housing Assistance Fund is a program designed to help various community heroes, including healthcare workers such as nurses, with their home purchase. This fund typically provides:

• Down payment assistance grants
• Closing cost assistance
• Reduced mortgage rates

Eligibility and assistance amounts can vary, so it’s important to check the current terms and availability.

State and local grants for nurses

While nationwide programs specifically for nurses are limited, many states and local governments offer assistance programs that nurses may qualify for:

• State Housing Finance Agency Programs: Many states offer down payment assistance or favorable loan terms for first-time homebuyers or those in public service roles, which often include nurses.
• Local Government Initiatives: Some cities or counties have programs to attract essential workers, including nurses, by offering homebuyer assistance.
• Employer-Assisted Housing Programs: Some hospitals or healthcare systems offer assistance to employees for home purchases in certain areas.

Eligibility requirements for nurse home loans

Home financing for nurses comes with various options, each with unique eligibility criteria. While requirements may differ across programs, common qualifications for nurse home loans typically include:

1. Professional status: Must be a licensed or certified nurse (RN, LPN, NP, etc.).
2. Employment: You typically need to be currently employed as a nurse.
3. Citizenship: You usually must be a U.S. citizen or permanent resident.
4. Primary residence: The home should be the nurse’s primary residence, not an investment property.

Credit score requirements for nurses

Credit score requirements can vary depending on the loan type and specific program.

• Conventional loans: Generally require a minimum score of 620.
• FHA loans: May accept scores as low as 580 with a 3.5% down payment or 500 with a 10% down payment.
• VA loans: No official minimum, but lenders typically look for at least 620.
• Nurse home buying programs: May have more flexible requirements, sometimes accepting scores as low as 600.

Remember, a higher credit score usually results in better loan terms and lower interest rates.

Income verification for nurses

Lenders will need to verify a nurse’s income to ensure they can afford the mortgage payments. This typically involves:

1. Providing recent pay stubs (usually the last 30 days)
2. W-2 forms for the past two years
3. Federal tax returns for the past two years
4. Proof of any additional income sources

For nurses with irregular schedules or overtime pay, lenders may use an average of the past two years’ income to determine qualifying income.

Employment verification: Full-time vs. part-time nurses

When applying for home loans for nurses, lenders place significant emphasis on employment verification. This process can differ slightly between full-time and part-time nursing positions:

Full-time nurses:

• Typically need to provide proof of steady employment for the past two years.
• May need a letter from their employer confirming their position and salary.

Part-time nurses:

• May need a longer employment history (e.g., 3-5 years) to demonstrate income stability.
• Might need to show a consistent number of hours worked per week.

Travel nurses or those with irregular schedules may face additional scrutiny. In these cases, providing detailed employment contracts and a history of consistent income can help in the loan approval process.

Remember, each lender and loan program may have slightly different requirements. It’s always best to speak directly with a loan officer specializing in home loans for nurses to understand the specific criteria for your situation.

How to overcome home buying challenges as a nurse

Qualifying for a mortgage as a nurse often comes with its own set of hurdles. Lenders are generally focused on income verification, but they may lack a comprehensive understanding of how the nursing profession is structured.

As a result, you might find yourself in the position of having to explain why nurses should be considered a special case in the mortgage application process.

Here are some tips to help you secure home loans for nurses.

1. Save employment documentation

Keep all your pay stubs from every job, either in digital format or as physical copies. Nurses, in particular, might need to present up to two years’ worth of pay stubs to verify income such as bonuses, overtime, and other non-regular earnings.

While not necessary for pre-qualification, these documents are crucial for lenders. They need concrete evidence of your overtime and additional income, which your pay stubs and spreadsheet records can effectively demonstrate.

2. Manage irregular income

Of course, your basic pay should count toward your qualifying income when applying for a mortgage. But it can become more complicated when it comes to overtime, shift differentials, and “extra” pay.

With those, lenders are likely to look back over the last couple of years to see your average gross pay. If you recently had a schedule change or took on more hours, that might not count toward your income right away.

For example, if you’ve only just started earning the higher hourly rate for night shifts, lenders are unlikely to consider that when deciding how much you can borrow. It might help to get your employer to write to the lender, verifying that this will be a long-term arrangement.

You can also write an explanatory letter with your application, telling the lender why you think it should take more of your income into account. Sometimes, this strategy works. But not always.

3. Handle student loan debt

As higher nursing qualifications become more valuable, many nurses take on high levels of student debt. That can affect your home-buying budget because of your debt-to-income ratio (DTI).

Lenders worry that borrowers cannot comfortably afford their mortgage payments and other homeownership costs if they have too many other debts. Unfortunately, student loans can compound that debt burden.

There are ways to drive down your DTI, including paying off big monthly debts with small balances. For example, if your auto loan payments are high but you’ve nearly paid them off, get rid of them before applying for your mortgage.

Nurse.org has an excellent article that goes into more detail about applying for a mortgage as a nurse. And it covers most of what we’ve said and more. You can learn more here.

4. Considerations for travel nurses

Travel nurses sometimes have to seek out lenders that understand their work.

You know that you can hop from contract to contract and agency to agency and never skip a beat, except when you choose to take a vacation. But to a lender, your employment record looks patchy and might suggest you can’t hold down a job.

Again, you can explain to lenders how your employment works. If one won’t listen, move on to those who will.

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How to choose the right home loan for nurses

Finding the ideal mortgage is an important step in the home-buying process, and for nurses, this choice may be affected by a number of factors.

While there’s no one-size-fits-all answer, the best home loans for nurse practitioners will depend on individual circumstances such as credit score, down payment, and even military service.

Example 1: When should nurses consider a VA loan?

If you have served or are currently serving in the military, either as a nurse or in another capacity, a VA loan is likely your best option.

VA loans come with several benefits, including no down payment and no private mortgage insurance (PMI), making them an attractive choice for those who qualify.

Example 2: When should a nurse choose a conventional loan?

For nurses who have never served in the military but have a good credit score and a decent down payment, a conventional loan is often the next best option.

These loans typically offer competitive interest rates and may require a lower down payment compared to other loan types.

Example 3: When should nurses use an FHA loan?

If your credit score falls within the 580–619 range, an FHA loan might be your best bet. The Federal Housing Administration is backing these loans, which are more forgiving of lower credit scores.

However, they do require an upfront mortgage insurance premium and ongoing monthly premiums.

Example 4: When should a nurse choose a USDA loan?

Lastly, for nurses and eligible healthcare workers with limited savings who are looking to buy in a rural area, a USDA loan could be the perfect fit, provided your household income meets the eligibility criteria.

These loans offer 100% financing, meaning no down payment is required, and they also have lower mortgage insurance costs.

FAQ: Home loans for nurses

Turning your nursing career into homeownership

Nurses can often find excellent deals when they take advantage of healthcare-oriented mortgage and assistance programs. These specialized home loans for nurses and grants for nurses buying a home are tailored to meet the unique needs of healthcare professionals.

But don’t stop at finding the right loan program. You should also shop around for the best mortgage lender. Each lender you apply to will probably present you with a different set of mortgage rates and closing costs. So get quotes from several and pick the one with the best deal for you.

You’ll not only benefit from the specialized offerings of nurse mortgage programs but also from the competitive landscape of conventional lending.

Resources

¹Nurse Next Door program

²Homes for Heroes program