Doctor Loan vs Conventional Mortgage in Sacramento
Here is the short answer. If you have 20% to put down and you plan to stay in your home for years, a conventional mortgage usually wins on total cost. If you are early in your medical career, carrying student loans, and short on down payment cash, a physician loan can get you into a Sacramento home years sooner without private mortgage insurance. Neither one is automatically better. The right choice depends on your cash, your timeline, and your career stage. This guide walks through both, with real Sacramento numbers.
What Is a Physician Loan?
A physician loan (sometimes called a doctor loan or doctor mortgage) is a specialty program some lenders offer to medical professionals. The typical features look like this:
Low or zero down payment, sometimes on loan amounts well above the conforming limit
No private mortgage insurance, even with little or nothing down
Friendlier treatment of student loan debt when calculating your debt to income ratio
The ability to close on a signed employment contract before your first paycheck arrives
These programs exist because lenders view physicians as strong long term borrowers, even when their current balance sheet looks rough. High student debt plus a new job plus no savings would sink a normal application. Physician programs are built to see past that.
One important caveat: not every lender defines "physician" the same way. Some programs cover MDs and DOs only. Others extend to dentists, veterinarians, PAs, and nurse practitioners, and some do not. If you are a PA or NP, eligibility is inconsistent across lenders, and it pays to have someone shop programs on your behalf. There is a full guide to that on this blog: The Mortgage Guide for PAs and Nurse Practitioners in Sacramento.
What Is a Conventional Mortgage?
A conventional loan is the standard mortgage most buyers use. It is not backed by the government, and it follows the guidelines set by Fannie Mae and Freddie Mac. Conventional loans generally offer the widest menu of options (30 year fixed, 15 year fixed, adjustable rate) and, for well qualified borrowers with a solid down payment, often the most competitive overall pricing.
The catch is the qualifying math. Conventional underwriting counts your student loans against you with less mercy, wants documented income history, and charges private mortgage insurance if you put down less than 20%.
The 2026 Sacramento Number That Changes Everything: $832,750
For 2026, the conforming loan limit in Sacramento, Placer, El Dorado, and Yolo counties is $832,750 for a single unit home. Borrow at or under that number and you are in conforming territory, where conventional pricing is at its best and down payments can go as low as 3% for qualifying buyers (with PMI). Borrow above it and you are in jumbo territory, where underwriting gets stricter: bigger reserve requirements, tighter debt to income limits, more documentation.
Why does this matter so much for physicians? Because a lot of the homes doctors shop for in this market sit near or above that line. Think El Dorado Hills, Folsom, Granite Bay, East Sacramento. Put 10% down on a $950,000 house and your loan amount lands in jumbo territory on a conventional loan. That is exactly the zone where physician loan programs shine, because many of them lend above the conforming limit with little down and no PMI, using their own underwriting instead of jumbo rules.
If You Are a Resident or New Grad
This is where the honest conversation happens, so here it is.
A physician loan makes buying possible for you in a way almost nothing else does. You can close on a contract before your start date. Your student loans get gentler treatment. You do not need 20% saved, and you skip PMI. If you are starting a multi year position in the Sacramento region and you want to own, this is the tool built for you.
But possible and wise are not the same thing. Before you use that tool, pressure test the decision itself:
How long will you actually be here? Buying and later selling a home carries real transaction costs. If your training or first job might move you in two or three years, renting can genuinely come out ahead, even in a rising market.
Zero down means zero cushion. With no equity on day one, a soft market at the wrong moment can leave you owing more than the home is worth right when you need to move.
Some physician programs are structured as adjustable rate loans only. An ARM is not a bad product, but you need to know your adjustment schedule and have a plan for it, not just the teaser payment.
A lender approving you for a payment is not the same as that payment fitting your life. Residency income is tight. Leave room for the rest of your life.
If you work through those questions and buying still makes sense, a physician loan is likely your best path, and the right move is comparing the actual programs available to you rather than taking the first offer from the bank your hospital recommends.
If You Are an Established Attending
Different stage, different math. If you have been practicing for a while, your income is documented, and you have real savings, the physician loan loses much of its advantage.
With 20% down on a conforming loan amount, a conventional mortgage typically gives you access to the sharpest pricing available, no PMI, and your pick of loan structures, including the 30 year fixed that lets you sleep at night. The interest you save over the life of the loan by putting real money down is a guaranteed return, which is more than anyone can promise you about the alternatives.
The counterargument worth taking seriously: money you put into a down payment is money you cannot put toward student loans, retirement accounts, or investments. Some attendings deliberately choose a physician loan with a smaller down payment to keep cash working elsewhere. That can be a reasonable strategy. It is a choice about opportunity cost, not a free lunch, and it deserves a real conversation with actual numbers rather than a rule of thumb.
Where the physician loan still earns a spot for attendings: jumbo purchases with less than 20% down. If you are buying at $1.1 million in Granite Bay and you would rather not park $220,000 in a down payment, a physician program can beat the conventional jumbo alternative on both down payment and PMI.
The Quick Decision Framework
20% down available, staying 5+ years, loan at or under $832,750: conventional usually wins
Little cash, big student loans, new contract in hand: physician loan, after you have pressure tested the buy decision itself
Jumbo price point with less than 20% down: compare physician programs against jumbo head to head
Not sure your profession qualifies (PA, NP, dentist, vet): shop lenders, because eligibility varies program to program
Frequently Asked Questions
Do physician loans have higher interest rates than conventional loans? Often slightly, yes, though it varies by lender and by how much you are putting down. The fair comparison is total cost: rate plus PMI (or the lack of it) plus what your down payment cash could be doing elsewhere. Sometimes the physician loan wins that math even with a higher rate. Sometimes it does not.
Can I use a physician loan for a home above the conforming limit in Sacramento? Many physician programs lend above the $832,750 conforming limit, which is one of their biggest advantages in this market. Maximum loan amounts and down payment tiers vary by program, so confirm the specifics before you shop for homes.
Do PAs and nurse practitioners qualify for physician loans? Sometimes. Eligibility is inconsistent across lenders. Some programs include PAs and NPs, others limit eligibility to physicians and dentists. This is a case where working with someone who can shop multiple programs matters more than usual.
Should a medical resident buy a house in Sacramento? It depends heavily on how long you will stay. Short training timelines make the transaction costs of buying and selling hard to recover. If you will be in the area through training and beyond, ownership starts to make more sense. Run the rent versus buy math honestly before deciding.
Can I refinance out of a physician loan later? Generally yes. A common path is using a physician loan to buy early in your career, then refinancing into a conventional loan once you have equity and established income. Whether that pencils out depends on rates and closing costs at the time, so treat it as an option, not a plan you can count on.
Is a physician loan the same as an FHA or VA loan? No. FHA and VA are government backed programs open to eligible buyers regardless of profession. Physician loans are private specialty programs from individual lenders. A veteran physician might actually compare a VA loan against a doctor loan, and the VA loan often competes very well.
Thinking through a physician loan or a conventional mortgage in the Sacramento area? The Chris Kennedy Team at Reliant Lending helps medical professionals compare real programs side by side, from residents buying their first place to attendings weighing jumbo options. Call (916) 794-0777 or visit thechriskennedyteam.com to talk through your numbers.
The Chris Kennedy Team at Reliant Lending, NMLS #971546. This content is for educational purposes only and is not a commitment to lend. Program terms, eligibility, and availability vary by lender and are subject to change. All loans subject to credit approval.