Home Loans for Nurses: 2023 Mortgage Programs and Grants

Are there home loans for nurses?

Yes, there are quite a few special home loans for nurses. On top of that, many local and national assistance programs can provide financial help to nurses and medical professionals with down payment and closing costs. Especially, when they’re a first-time home buyer.

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
• Private lender options
• Home buying challenges
• Choosing a loan

6 best home loans for nurses

We recommend six mortgage programs for nurses to explore. Two are specialized home loans for nurses, and four are “standard” loan programs for which just about anyone can apply. You might find that, even though special perks are available to nurses, one of the mainstream mortgage programs will be your best option.

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 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 originate 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 program, though, 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 is way beyond what you’ll get from other national programs.”

Note that you must use real estate professionals recommended by Homes for Heroes to benefit. 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 loan available today. These loans are not backed by the government — like others in 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.

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.

Consider opting for a conforming loan if you can. Because with those, you can escape mortgage insurance costs more easily and cheaply.

5. VA loans for nurses

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. If you’re eligible, this will likely be your best bet.

Lenders set their own credit score thresholds, usually between 580 and 660. But you need no 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 them 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 whether the place where you want to buy is eligible.

Grants for nurses

Most of the home loans for nurses we highlight above can be used with down payment assistance (DPA) programs, which could help cover your down payment and closing costs.

All states and many cities and counties, offer grants and DPA programs for first-time buyers. There are thousands of these across the country. In some places, you can get home buying assistance running into the tens of thousands of dollars.

Some of these down payment assistance programs offer special privileges to nurses and other essential workers. 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.

Note that each DPA sets its own eligibility requirements and caps on the amount of money it will grant or lend you. So you’ll have to do a bit of research to find what you could be in line for and whether you qualify.

Loan options from private lenders

Some private mortgage lenders offer reduced closing costs or other perks for nurses. For example, Homes for Champions (RealFi Home Funding Corp.) says that its offering for nurses and doctors can save you “up to 2.00% to 3.00%" by eliminating many fees normally due on closing. But this company is a licensed direct lender in only 13 states, plus Washington DC: CT, DE, FL, GA, MD, NC, NJ, NY, PA, SC, TX, and VA.

Other companies or organizations also offer help to homebuyers who are nurses.

One such program is the Everyday Hero Housing Housing Assistance Fund. It seems that it refunds you seller concessions negotiated by specialist real estate agents. You wouldn’t be alone in assuming that’s a scam. Although it has an A+ rating with the Better Business Bureau. So it may be worth checking out. Remember that seller concessions are hard to obtain in sellers’ markets, which most are at the time of writing.

Meanwhile, Nurse Home Loan Programs says its goal is “to educate and connect our Nurses with the best home loan solutions for them all over the country.”

It might be worth talking to one of the company’s specialists if your applications are getting rejected. Because that does sometimes happen with lenders that don’t understand nurses’ special working conditions, such as overtime and differential income — or that struggle to grasp the challenges of high student debt and travel nurses’ seemingly chaotic employment records. (More on those and similar challenges below.)

How to overcome home buying challenges as a nurse

Qualifying for a mortgage as a nurse can sometimes present challenges. Lenders need to verify your income, but not all understand how nursing works. In addition, you may have to explain to them why the way your job is structured makes nurses a special case.

Nursing income for mortgages

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 the lender verifying 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 into account more of your income. Sometimes this strategy works. But not always.

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 others that will.

Student 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 can 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 it off, get rid of it 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.

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How to choose the right home loan for nurses

Of course, there’s no single best home purchase loan for nurses. That will depend on your personal circumstances.

• If you are serving — or have previously served — in the military (as a nurse or not), a VA loan is highly likely to suit you best
• If you’ve never served, but have good credit and a decent down payment, a conventional loan is often the next best option
• If your credit score is in the 580-619 range, you might need to go for an FHA loan
• Finally, USDA loans can perfectly suit someone with small savings and buying in a rural area, providing their household income isn’t too high

From that brief summary, you probably already have an idea of the type of loan that suits you best.

What are today’s mortgage rates?

Nurses can often find excellent deals when they take advantage of healthcare-oriented mortgage and assistance programs.

But don’t stop at finding the right loan program. You should also shop around for the best mortgage lender.

You’ll likely be offered different mortgage rates and closing costs by each lender you apply to. So get quotes from several and pick the one with the best deal for you.

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