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Top 4 Home Loans for Nurses in 2022
Nurses are an essential part of society and make for terrific homeowners. Nurses have high wage incomes and stable employment. Plus, they meet the mortgage industry’s 2-year work history requirement with a completed nursing school degree.
Mortgage lenders approve nurses across a wide range of credit scores and allow nurses to make little or no down payment for a home. Nurse practitioners can move into homeownership as other professionals do – through conventional mortgage lending and government-backed entities.
The most challenging aspect of getting a mortgage approved for a nurse is showing proof of income.
This post outlines home loans for nurses, how to choose the best option, and helpful tips for income verification.
4 Best Mortgage Loans for Nurses
There are four low and no down payment mortgages for nurses. The loans are government-backed and available in all 50 states and Washington D.C.
Special applications aren’t required.
1. Conventional Mortgages For Nurses
Best fit for: Nurses looking for low down payment options
Conventional mortgages represent 78 percent of mortgages made, and many nurses use conventional mortgages to buy their first homes. Conventional loans are backed by government agencies Fannie Mae or Freddie Mac and allow for low down payments of 3 percent.
Conventional mortgages are the default mortgage choice for most home buyers:
- 3% down payment with the same low rates as 20% down
- Subsidized interest rates in low- and middle-income areas
- Flexible income guidelines for nurses with contract documentation
2. FHA Mortgages For Nurses
Best fit for: Nurses with lower credit scores
The FHA mortgage is known for its flexible approval standards:
- 3.5% down payment with 580 credit score; 10% down payment with 500 credit score
- The same low mortgage rate for all credit scores
- No interest rate adjustment for 2-4 unit homes
The FHA backs approximately ten percent of new mortgages.
3. USDA Mortgages For Nurses
Best fit for: Nurses who live outside of city centers
USDA mortgages are 100% mortgage loans for buying in less-dense areas, including rural and suburban neighborhoods. The U.S. Department of Agriculture backs USDA mortgages. They offer low mortgage rates and reduced mortgage insurance premiums.
USDA mortgages are for buyers of modest means buying modest homes.
- No down payment required
- Minimum 580 credit score
- Low mortgage rates versus other mortgage types
USDA mortgages work great for nurses in rural areas and exurbs. Ninety-one percent of the U.S. is a USDA-eligible locale.
4. VA Mortgages For Nurses
Best fit for: Nurses who served in any branch of the U.S. military
VA mortgages are no-money-down mortgages available to active duty, veterans of the military, and surviving spouses. Loans are guaranteed by the Department of Veterans Affairs and never require mortgage insurance.
- No down payment required
- No mortgage insurance required
- Minimum 620 credit score
Some nurses are exempt from VA mortgage closing costs, including underwriting and attorney fees.
Alternative “Nurse Mortgage” Websites
As a nurse, you can buy a home and get a “nurse mortgage,” but beware of scam websites that offer things like “grants for nurses”‘ and other incentives to nurses and nursing students.
There are no government-backed mortgage programs for nurses.
TeacherNextDoor.us, for example, purports to offer cash grants to nurses. Pipeline ROI runs the website. Pipeline ROI is a lead generation company. It is not a mortgage lender and has no legal disclaimers on its site required of mortgage companies.
Another website, UseHHAF.org, advertises unique mortgage options for nurses via the Everyday Hero Housing Assistance Fund. The fund is backed by an entity called The Virtual Sports Academy, which operates on community donations like GoFundMe. The group’s website is down.
A third website, Hero Home Programs, may also be fraudulent or expired. The website claims its logo is trademarked by the U.S. Patent and Trademark Office. Yet, the USTPO lists the mark as “abandoned,” and the lead-generating website lists none of the required mortgage company disclosures.
Other websites that tout mortgage assistance programs for nurses rename federal programs as “down payment assistance programs for nurses” and expect the public won’t notice. These sites are lead generators and are rarely licensed by their respective states.
Get pre-approved for a mortgage today.
Tips for Getting Approved as a Staff Nurse
A mortgage approval’s most challenging aspect for a staff nurse is income verification.
Staff nurses tend to earn inconsistent income that combines base pay plus salary for extra shifts, overtime, and shift differentials. Thorough income documentation is an underrated mortgage hack – especially for nurses with erratic income.
Mortgage lenders recommend three income-assistive steps to get your mortgage approved faster.
Store every pay stub from every job digitally or on paper
Keep an ongoing record of your paychecks from your jobs. Store them digitally on your computer or in your email, or store printed copies of your paychecks in a folder. Paychecks prove your base salary plus the extra income you’ve earned with each pay cycle.
Unlike other professionals, nurses may be asked to show up to two years of pay stubs to prove bonus income, overtime income, and other irregular income. You don’t need your pay stubs to get pre-approved, but you’ll want them before bidding on a property.
Have your W-2 statements available, too.
Keep a record of your extra shifts and overtime
When you work extra shifts, keep a separate file or spreadsheet that lists your hours worked and the pay you received. Documenting overtime helps mortgage lenders qualify your household income, which raises your maximum purchase price.
Lenders require written proof of overtime and extra pay. Your spreadsheet records and paystubs provide that proof.
Make a contact in human resources for income documentation
Mortgage lenders worry that your overtime income will stop suddenly. A human resources representative can quell those fears with a simple Letter of Explanation.
The letter should state your name, job title, and a note that your income – including bonus pay – is stable and consistent. You won’t need a Letter of Explanation until you’ve found a home.
It’s good to make a friendly contact within your Human Resources department early.
Tips for Getting Approved as a Travel Nurse
Travel nurses who want to buy their first home face different mortgage challenges compared to healthcare professionals and other mortgage applicants.
- Earn variable income based on job length and location
- Take employment gaps ranging from a few weeks to a few months
- Collect per diem income that isn’t declared on applications
Here are three guidelines to help get your travel nurse mortgage approved.
Keep detailed records of your jobs and per diem accounts
Mortgage lenders struggle to calculate travel nursing income. Nurse contracts are seasonal and vary based on location and job length. Furthermore, the time between jobs is inconsistent.
As a travel nurse and home buyer, you can help your mortgage get approved by:
- Documenting your complete job history and gaps in employment
- Providing offer letters, contracts, and pay stubs for every job you’ve had
- Writing a detailed letter of explanation to help your lender understand your career
Travel nurses with shorter-length careers should include their staff nurse work history and income documentation, when applicable.
Shorten your employment gaps while you plan to buy a home
Mortgage lenders use a standard formula to calculate income for travel nurses:
[Taxable income from the prior two years] DIVIDED BY [24 months]
Lenders do not calculate income based on pending contracts or offer letters and do not prorate or average your income based on the number of months worked. Your mortgage approval only uses your average monthly income from the prior two years.
Note: per diem expenses are non-taxable income. They cannot be included in your calculations, and reimbursable travel expenses must also be excluded. Only taxable income can be used on a mortgage application.
Maximize your taxable income when sensible
Travel nursing contracts are generally split between taxable income and non-taxable income. Taxable income is your hourly wage, plus wages earned from overtime and bonus income. Non-taxable income is reimbursements for meals, housing, and incidentals.
Taxable income can be used to qualify for a mortgage as a nurse. Non-taxable cannot be used to qualify. It might be sensible to shift some of your per diem income to taxable wages – despite the additional tax burden when you know you want to buy a home. You may qualify to buy a more expensive home.
Talk with your accountant about the effect of changing your income.
Get Pre-Approved For A Mortgage
Mortgage lenders like making mortgages to staff and travel nurses. Nurses earn good household incomes, and their profession is in demand. The government agencies support nurse lending, too.
Find out how much house you can afford to buy. Get started with a nurse mortgage pre-approval today. Results are available online.
Get your mortgage pre-approval started right now.
Get pre-approved for a mortgage today.