A registered nurse mortgage loan or a “nurse’s loan” is a specific type of mortgage loan aimed at assisting medical industry professionals such as registered nurses achieve their dreams of home ownership. Unlike other mortgage loan options, a RN loan requires zero down payment and is flexible in ways a conventional mortgage may not be. Additionally, other loan types may require that borrowers pay a Private Mortgage Insurance (PMI) if a down payment of less than 20% is made. In short, a RN loan offers a zero down payment and the ability to skip PMI. Read on for more information about a RN mortgage loan and how we can help you qualify.
Nursing Professional – Down Payment Gift Program
Those individuals in the nursing health care profession may apply for a Gift/Grant to assist with the down payment of their home. This is a one-time gift and there is no repayment if the home is maintained as their primary residence for at least 60 months from time of closing. The grant becomes a second mortgage on the property with NO REPAYMENT if the purchaser lives in the home for five years. The repayment obligation decreases by 1/60 for each month they live in the home. At the end of five years (60 months) the Gift is totally forgiven.
Registered Nurse Loan v Traditional Mortgage
Registered nurse loans are a specialty mortgage loan created to assist individuals new to the medical field the opportunity to quality for a home loan. Conventional mortgages have clearly defined rules regarding debt to income ratios, proof of long term employment, a sizeable down payment, and without that down payment a private mortgage insurance.
Significant income and long-term employment are often requirements to qualify for a mortgage loan. Medical professionals have the potential to earn more money in the future and are less likely to default on their loans. Lenders keep this in mind and are willing to compromise on a few key points. In this instance even nursing students are eligible to qualify for the program.
How a RN Mortgage Loan Works
Compared to a conventional mortgage loan, a RN loan offers a way for new nurses and medical professionals to quality for a home mortgage loan earlier than they would with other loan options. With the grant substituting for a down payment, and flexibility with DTI and employment history, nurses can qualify with ease and afford to buy a home. Here’s how some of the other elements of a mortgage loan are different in this specialty loan type compared to conventional mortgage.
Debt to Income (DTI) Ratio
An important measurement of qualifications for a conventional mortgage. However, in a RN’s mortgage loan the amount of money you owe compared to your income isn’t as big of a factor. In this type of loan the DTI is required to be 50% or lower. Lenders check this to ensure that borrowers are able to easily manage their monthly payments without defaulting on the loan. The higher the DTI the more risky the loan. Debts are still scrutinized, like credit card debt, car loans, and other expenses are examined, but the higher DTI associated with medical professionals is not necessarily a disqualifier as long as it is within the loan limits.
Designations to Generate Eligibility to Nurses Grants
- Certified Nursing Assistant
- Licensed Practical Nurse
- Registered Nurse
- Advanced Practice Registered Nurse
- Master of Science in Nursing
- Nurse Managers and Executives
- Certified Registered Nurse Anesthetist
- Clinical Nurse Specialists
- Critical Care Nurse
- ER Nurse
- Family Nurse Practitioner
- Geriatric Nurse
- Perioperative Nurse
- Mental Health Nurse
- Nurse Educator
- Nurse Manager
- Nurse Midwife
- Nursing Administrator
- Veterinary Nurse
- Veterinary Assistant
- Veterinary Technician
- Zoological Assistant
- Dental Assistant
- Dental Hygienist
- Pharmacy Technicians
Grant/Gift Program Highlights
- The Grant is 3% to 5% of the selling price or appraised value, whichever is lowest.
- Down Payment Requirements: 3.5% is the minimum down payment.
- Maximum Sale Price: $420, 680, but may be greater is designated “high-cost” areas.
- Single Family Units only
- Applicant may own a second home and/or investment properties and still be eligible.
Income Limits: None.
Income Restrictions: None
In addition to a degree, in order to qualify for a nursing professional down payment grant a borrower will need to provide proof of employment and income, but offer much flexibility. A contract of employment is considered sufficient to verify income in the absence of a pay stub or W-2.
Other conditions must be met such as the property being purchased must be used as a primary residence. Lastly, RN mortgage loans cannot be used to finance a second home or investment property and usually won’t be granted to multi-family residences such as condominiums.
Why Nursing Grants & Specialty Loans Are A Good Idea
While the earning power behind a registered nurse is high many nurses and medical professionals can’t qualify for a conventional loan. Your Nursing Mortgage Loan will require as little as 3.5% of the total purchase price as a down payment. Many nurses and medical professionals find the loan to be advantageous, and an excellent way to start down the path of home ownership.
You can get answers to more of your questions about a grant and specialty mortgage loan by speaking with our officers today.