Personal Finance / Home Buying Programs for Nurses
Nurses spend a lot of their time and energy caring for others. It’s just part of the job description. Most nursing professionals earn attractive salaries to compensate for the increased responsibilities of their jobs. That can spell both good news and bad news when they want to buy a house. Sure, nurses are in high demand, so they can be guaranteed a job just about anywhere they want it. Some even choose to work in flexible positions like PRN nurses. Banks sometimes view this as a strike against their creditworthiness, considering them unstable for risk assessment purposes. It may seem bizarre to discriminate against well-paid prospective borrowers, but that’s exactly what happens sometimes.
That’s the bad news. The good news is that nurses have options when it comes to choosing a lender, including using home buying programs specifically designed for healthcare professionals.
In this blog, we explore:
- Standard home loans for nurses
- Specialized home loans for nurses
- Loan options from private lenders
- Home loan grants for nurses
- Overcoming home buying challenges
Standard home loans for nurses
Nursing professionals are not required to use mortgage programs designed specifically for them in order to save money or to find assistance with the process. There are plenty of affordable home loans nurses can get that are easily accessible across the market. Some of the more popular options include:
Conventional home loans do not come with government backing. Most still conform to the rules of government-sponsored enterprises. A 3 percent down payment of the total cost of the home and a credit score of 620 or higher is a must to qualify for this type of standard home loan.
FHA loans appeal to nurses with credit scores between 580 and 620. They are backed by the Federal Housing Administration, which comes with some strings attached. One of those caveats is you must have a 3.5 percent down payment available at the time of loan approval. FHA loans also require private mortgage insurance (PMI). This is common practice any time a borrower puts down less than 20 percent on a home purchase. PMI protects the lender, not the borrower.
VA loans are backed by the U.S. Department of Veteran Affairs and are available to any nursing professional who also has served in the military. This is an attractive option to most nurses who qualify because they do not need a down payment to secure a low-interest rate and closing costs. Best of all, they also can avoid PMI. Lenders who provide mortgages through the VA loans program can set their credit score thresholds. Most opt for a range between 580 and 660.
USDA loans are backed by the U.S. Department of Agriculture. Like VA loans, they do not require a down payment to get the best interest rates. To qualify, nurses must have a credit score of at least 640 and meet household income limits. They must also commit to buying a home in a rural area. Nurses can use maps provided by the USDA to find out if the home they want to purchase is eligible under the program.
Expert advice from nurses like you
Specialized home loans for nurses
Regardless of where you live, there are two reputable specialized home loans for nurses’ programs operating nationwide. Nursing professionals can feel confident they will receive a fair evaluation of their risk assessment when applying for a mortgage through either of these financial lenders.
Nurse Next Door
Nurse Next Door is not a traditional mortgage lender. It neither lends money nor originates loans. It serves as a first-time homebuyer assistance program for nurses that matches them with aid programs, mortgages, and even available properties. Nurse Next Door also offers a Fresh Start Program for nurses with credit issues that may prevent them from buying a home. It can help get them back on track financially and ready to become mortgage borrowers. Need help with a down payment? Nurse Next Door has available grants and other financial assistance for nursing professionals who qualify.
Homes for Heroes
Another nationwide homeowner assistance program popular with nurses and other healthcare professionals is Homes for Heroes. It helps nurses buy, sell, or refinance their homes when they work with the recommended affiliate real estate and mortgage brokers. According to information provided by the program, nurses can save an average of $2,400 when they use Homes for Heroes. Real estate specialists approved through the program generate average savings of $1,700 on homes for borrowers. Likewise, if nurses use mortgage, title, and inspection specialists recommended by Homes for Heroes, they can save $500 on lending fees, $150 on title services, and $50 on their home inspections. The more referred specialists they use from the program, the better the savings.
Loan options from private lenders
Nurses can find some deals if they do a little research among private mortgage lenders. Private lenders often sweeten the pot for healthcare professionals by offering reduced closing costs and other perks. One such lender is Homes for Champions, a mortgage program from RealFi Home Funding Corp., which is licensed as a direct lender in 13 states plus the District of Columbia. Nurses can save between 2 and 3 percent by borrowing with them because they can avoid many of the fees associated with closing.
Another private lender that appeals to nurses is Nurse Home Loan Programs. It promises no PMI, low down payments for home purchases up to $1.5 million, and pre-approvals and qualifications. Where this program shines is its ability to help nurses who have been rejected by traditional mortgage lenders. Mortgage lenders sometimes misclassify differential income and overtime pay and struggle to understand the challenges associated with high student debt, which can lead to rejections for loans. Nurse Home Loan Programs’ specialists may be able to help nurses find a better fit so they can realize their homeownership dreams.
Home loan grants for nurses
In addition to the grant program from Nurse Next door previously mentioned, there are thousands of down payment assistance programs targeting nursing professionals. One of the most effective ways to identify one of these grant programs in your area is by visiting the website for your state’s Department of Housing and Urban Development (HUD). Eligibility requirements vary by program.
Overcoming home buying challenges
Nurses face some unique challenges when applying for mortgages. Lenders must verify eligibility requirements, including income and creditworthiness. The problem is many mortgage lenders do not understand how nursing works and they deny nurses access to the financial resources needed to buy homes. Here are some of the most common home-buying challenges nurses face and what they can do about them.
Traveling nurse income has mystified traditional mortgage lenders for years. Financial institutions like to review prospective borrowers’ average gross pay history to determine whether they are financially stable. Traveling nurses can go from working very few hours to exceeding full time. This confuses lenders and often leads them to deny these kinds of mortgage applications. One possible solution is to have the current employer write a letter verifying current employment conditions, including if they are long-term.
Student debt is another variable that can play into a mortgage lender’s denial of your application. Nurses who wish to advance their careers require higher levels of education. As any nurse can tell you, paying for nursing school isn’t cheap. Mortgage lenders can look at student debt as a risk factor they are unwilling to ignore. Working with one of the loan specialty programs mentioned earlier in this blog is an excellent way to come up with solutions that drive down debt-to-income ratio and increase chances of qualifying for a traditional mortgage.
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