The Best Home Buying Programs for Nurses | Incredible Health (2024)

Personal Finance / Home Buying Programs for Nurses

Nursing is a highly respected profession, and the demand for qualified, experienced registered nurses is so high that they can get a good-paying job just about anywhere they want. Still, some banks view nurses as a credit risk when it comes to extending them loans. Though this may feel discriminatory or counter-intuitive when a nurse is a well-paid prospective borrower, it happens.

The frustration of this phenomenon is palpable, especially when nurses spend so much of their time and energy caring for others, carry such significant responsibility, and earn attractive salaries. The good news is that when it comes to buying a house and choosing a lender, nurses have other options, including taking advantage of 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

Though nurses may encounter problems in applying for a housing loan, it doesn’t happen all the time, and there’s no requirement for nursing professionals to seek mortgage programs designed specifically for them. There are plenty of affordable home loans that are easily accessible across the market. Some of the more popular options include:

Conventional home loans. These do not come with government backing, though most conform to the rules of government-sponsored enterprises. To qualify, you typically must have a minimum of 3% down payment of the total cost of the home and a credit score of 620 or higher.

FHA loans appeal to nurses with credit scores between 580 and 620 (however, some lenders do still require a higher credit score). They’re backed by the Federal Housing Administration and come with some strings attached. One requirement is that you must have a 3.5% down payment available at the time of loan approval. FHA loans also require private mortgage insurance (PMI). Requiring this insurance is common when a borrower puts down less than 20% on a home purchase. PMI protects the lender, not the borrower.

The U.S. Department of Veteran Affairs backs VA loans and are available to any nursing professional who has also served in the military. This is an attractive option to most nurses who qualify because VA loans don’t require a down payment to secure a low interest rate and closing costs. Best of all, borrowers who take out VA loans can avoid PMI. Lenders who provide mortgages through the VA loans program set their own credit score thresholds, with most opting for a range between 580 and 660.

The U.S. Department of Agriculture backs USDA loans. 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 must meet household income limits. They also need to 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’s rules.

Specialized home loans for nurses

There are two reputable home loan programs that specialize in loans for nurses. Both operate nationally.

Nurse Next Door

Nurse Next Dooris not a traditional mortgage lender. Rather than lending money or originating 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 aFresh Start Programthat can help nurses with credit issues get back on track financially so they’re 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

Homes for Heroes is another nationwide homeowner assistance program popular with nurses and other healthcare professionals. It helps nurses buy, sell, or refinance their homes when they work with 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.

The more referred specialists they use from the program, the higher the savings. Working with real estate specialists approved through the program generates an average saving of $1,700, and using mortgage, title, and inspection specialists recommended by Homes for Heroes can save borrowers $500 on lending fees, $150 on title services, and $50 on home inspections.

Loan options from private lenders

With a little research, nurses can find other deals offered by private mortgage lenders who may be willing to sweeten the pot for healthcare professionals. This may include offeringreduced closing costs and other perks. One such lender is Mortgages for Champions, a mortgage program fromRealFi Home Funding Corp. that is licensed as a direct lender in 13 states plus the District of Columbia. Nurses can save between 2 and 3% by borrowing through them because they can avoid many of the fees associated with closing.

Home loan grants for nurses

In addition to the grant program from Nurse Next Door previously mentioned, there are numerous down payment assistance programs created especially for nursing professionals. One of the most effective ways to identify these programs in your area is by visiting the website of your state’s Department of Housing and Urban Development (HUD). Nurses should be aware that grants are usually limited and eligibility criteria vary significantly between programs.

Overcoming home buying challenges

Nurses can face unique challenges when applying for mortgages. Lenders must verify eligibility requirements, including income and creditworthiness, but since many mortgage lenders don’t understand how nursing works, they may deny nurses access to the financial resources they need to buy homes. Alex Capozzolo ofSD House Guys, a professional house buyer located in California, stated, “Getting approved for a loan to buy a home is more challenging than ever. Banks are extremely strict. Pay off as much debt as possible before applying. That will help make banks more interested in lending to you.” Here are some of the most common home-buying challenges nurses face and what you can do if you’re faced by any of them.

Traveling nurse incomehas mystified traditional mortgage lenders for years. Financial institutions like to review prospective borrowers’ average gross pay history to determine whether they are financially stable, but traveling nurses can go from working very few hours in oneo location to working more than full time hours in another, all at varying hourly rates. This can confuse some lenders and can lead them to deny nurses’ mortgage applications. One solution is to have your current employer write a letter verifying current employment conditions, making special mention if they are long-term.

Student debtis 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. Paying for nursing school isn’t cheap, and mortgage lenders can look at student debt as a risk factor. Working with one of the loan specialty programs mentioned earlier in this article is one way to find solutions that drive down debt-to-income ratio and increase your chance of qualifying for a traditional mortgage.

Looking for a new job to go with your new home? Browse our Nursing Jobs Board to find an exciting position in your nursing specialty.