Year one was the easy year and nobody told you that at the time.
You had a signed contract, so a lender could underwrite income you had not earned. You were in training when the file was written, so the student loan payment may not have counted at all. You bought with nothing down and no mortgage insurance.
Year two is different, and the difference is not obvious until it is expensive.
What changes on paper
Your income stops being a contract and becomes a history. Projected income from a fully executed contract is a mechanism for borrowers without pay history. Once you have pay stubs and a return, you are underwritten on what you actually earned, including how production, call pay, bonus and RVU-based compensation actually landed rather than what the contract projected. Variable compensation usually needs a history before it counts fully.
Your student loan payment becomes real. Under CMG Financial's MedPro Premier guidelines (NMLS #1820, revised 09/11/2026), payments in deferment, forbearance or reporting $0 under an income-based repayment plan may be excluded only if the borrower is currently in residency, or currently in training in a medical clinical fellowship program.
You are not. For all other student loans, a monthly payment must be included in your monthly debt obligations. If the credit report shows a payment, that is the figure. If it shows none or $0, one is calculated another way.
And your income-based repayment plan is about to recalculate against attending income, which means the number going into the ratio is not the number you remember.
Your ratio ceiling has not moved. Still 50% at 95% loan-to-value or below, 45% above 95%, and 45% on ARMs and 15-year fixed loans. Same ceiling, much larger denominator on the debt side.
The scenario to avoid
A resident buys at the absolute top of what the exclusion permits. Two years later the exclusion is gone, the student loan payment is fully in the ratio, and the house is fine on cash flow but the borrower is now unfinanceable for anything else.
They cannot buy the bigger house when the second child arrives. They cannot buy an investment property. A rate and term refinance may still work, but the ratio no longer supports a move.
Nothing went wrong. The payment is being made every month. They are simply stuck, because the file was built on a condition that expired.
The fix costs nothing and takes ten minutes: before buying in year one, run the ratio with the post-training student loan payment included and confirm the house still clears. If it does not, buy less house. You will be glad in year three.
What to do in year two
Build reserves rather than paying down principal. Reserves are documented liquid assets, and they are the constraint on your next transaction. Principal is equity you cannot access on this program, since it runs purchase and rate and term refinance only, with no cash-out.
Do not casually keep a property. If you move and rent out the first house, that is a financed property, and each additional financed one-to-four unit property requires three months of reserves on the next file. You may own four financed properties total including the subject. Physicians hit that ceiling faster than they expect.
Get the student loan payment right on paper. If you are on an income-driven plan, know what the recalculated payment will be and when. If you are refinancing student debt privately, understand that the new payment is what a lender will use.
Keep the recast in your pocket. The recast policy on this program allows a lump sum applied to principal with re-amortization over the remaining term, keeping your rate. The loan must be current with no record of 30-day delinquency, there is no limit on the number of recast requests and no waiting period, ARMs are not eligible until after the first reset, it takes around 60 days, and approval is not guaranteed.
For a physician with an annual bonus or a production distribution, that is a far better instrument than a refinance. A servicing fee rather than a full set of closing costs, no new underwrite, and no new rate.
When a second physician loan is the answer
These programs are primary residence only. So a second one is for a move, not for an addition.
If you are relocating, you can use the program again on the new primary residence, subject to the four financed property limit and the three months of reserves for each property you keep. Plan whether you are selling or keeping before you shop, because the answer changes your reserve requirement and therefore your price range.
The year two checklist
- Recalculate your ratio with the actual post-training student loan payment.
- Decide now whether the first house is sold or kept when you move. Price both.
- Build documented liquid reserves rather than making extra principal payments.
- Ask your servicer whether your loan is recast eligible and what the fee is.
- If your compensation is production based, keep clean records. It will need a history.
Common questions
Does the student loan exclusion continue after residency? No. It applies only while you are currently in residency or in training in a clinical fellowship program. After that a payment must be included in the debt-to-income ratio.
Can I use a physician loan twice? Yes, for a primary residence each time. These programs are primary residence only, so the second use is a relocation rather than a second home or an investment property.
What happens to my ratio when income-based repayment recalculates? It rises, because the recalculated payment is based on attending income. That is the number a lender uses, so find out what it will be before you buy at the top of your approval.
Should I pay down my mortgage or build savings in year two? Documented liquid reserves are what constrain your next transaction, and this program has no cash-out option to get equity back. Reserves are usually the more useful place for the money.
Can I keep my first house when I move? Yes, within the four financed property limit, and each additional financed property adds three months of reserves to the new file.
Related reading
- Physician and medical professional home loans, the full index for this topic
- Refinancing a Physician Loan: When to Leave It Alone and When to Move
- Medical Residents and Fellows: How Student Loan Payments Are Excluded From Your Mortgage Qualification
- Nine Ways Physicians Lose the House: Mistakes That Kill a Doctor Loan
Why bring this file to us
- We model year three before you buy in year one. A house that only works while a payment is excluded is not a house that works.
- We plan the second purchase around the first. Every financed property you keep costs three months of reserves on the next file.
- We keep the recast on the table, because lumpy attending income and a lump sum principal reduction fit each other well.
- Broker model. Multiple investors rather than one bank's shelf, which is what a file like this needs when the first answer is no.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending and a Certified Mortgage Planner, NMLS #173141, originating mortgages since 1999. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
If you bought at the top of the exclusion, let me run your ratio the way it will look in two years. Better to know now, while there are still options.
Program figures in this post come from the CMG Financial (NMLS #1820) guideline set named above, as published on the revision date given. CMG Financial is the parent company of EPiQ Lending. These figures describe one investor's program at one point in time. Other investors price and underwrite the same borrower differently, guidelines change without notice, and nothing here is an offer of any specific program or terms. Confirm current eligibility on your own file before you plan around any of it.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Rates, terms, and program guidelines change and depend on credit approval, property appraisal, income and asset verification, and other qualifying factors. Not all applicants will qualify. Non-QM, asset-based and business purpose financing carry different pricing, terms and consumer protections than agency financing. Consult your tax advisor regarding the tax treatment of any income or distribution strategy.
Find out what you qualify for before you start looking
Tell me where you are in training or practice and I will tell you which structure fits your file, what it needs, and what it does not. No credit pull to have the conversation.
