Home Loans for Nurses

Updated on April 9, 2024

At a Glance

  • Easier mortgage approval for staff nurses with a base income.
  • Consideration of actual income, including overtime and shift differentials, varies among lenders.
  • Travel nurses may face challenges due to employment gaps, but documentation and context can help.
  • Understanding pay structures, financial priorities, and exploring nursing home loan assistance programs are crucial.

Being a nurse offers a lot of benefits. In addition to a fulfilling role in which you help others, nursing is a flexible profession with a great deal of job security. Whatsmore, nurses’ salaries are very attractive, averaging at about $70,000 annually according to U.S. News & World Report.

But being a healthcare professional can have its drawbacks, too–especially when it comes to mortgages.

Banks and other lenders can see “flexible” schedules as an “unstable” when performing a risk assessment on a mortgage. Furthermore, it can be difficult to account for a full-time schedule when many of your hours are extra shifts. Simply put: Nurses’ financial situations are complex and are often hard to present as stable to mortgage lenders.

For travel nurses, who often have gaps in employment and with employers, and in spite of making large salaries, proving stability to lenders is an even bigger hurdle.

Getting a Mortgage as a Nurse

Of the types of nurses discussed here, staff nurses will have an easier time securing a mortgage. For one thing, staff nurses will have a base income to present to lenders, which is a positive when it comes to risk assessment. But that doesn’t mean that mortgage approval is guaranteed.

Base Income vs. Actual Income

As mentioned above, a staff nurse can bring their lender proof of their base income (such as an offer letter) when applying for a mortgage. But in almost all cases, base income does not account for the actual income a nurse brings home.

Nursing wages can be subdivided into several kinds of pay, including shift hours, overtime, and shift differential. According to a study from researchers at New York University (NYU) Rory Meyers College of Nursing, one-third of all surveyed nurses said that they work overtime beyond their typical 12-hour shift. So, how does a mortgage lender account for a staff nurse’s actual income during risk assessment?

“[A] lender’s ability to use all of their income will depend on how long they have been on the job,” says Tammi Lindley, a senior loan officer at Mortgage Express. “For a full-time nurse, all of the base pay is considered, but the various other types of pay can only be included if the nurse has a two-year history of receiving this type of pay.”

Essentially, it comes down to how the individual lender weighs non-base salary income when determining the loan amount you qualify for. More than likely, they will weigh overtime and night shift differential pay differently than your base pay.

For instance, night shift differential refers to the increased rate of pay for regularly scheduled, non-overtime work hours between 3 p.m. and 8 a.m. And it will be up to the lender how to consider those hours when determining whether to approve you for a loan and for what amount. Some may see it as high income, some may see it as less consistent income. Typically, non-standard pay, such as night shift differential, overtime, and bonuses, will be factored in similarly to standard pay of a consistent history (12-24 months) of these kinds of income can be shown.

How to Calculate Your Total Income as Nurse

So, how do you figure out your total income? Assuming you have 12-24 months worth of paystubs showing consistent night shift differential, overtime, and bonuses, these are the steps you would take to show your total income:

Step 1 – Calculate Your Current Base Pay – Do determine your base pay, multiply your hourly rate by the number of guaranteed hours you work every week. So, for example, if your base pay is $35 an hour and you work a full 40 hours per week:

$35 x 40 (hours) = $,1400

$1400 x 52 (weeks) = $72,800

$72,800 / 12 (months) = $6,067/month

Step 2 – Calculate Your Differential Pay (for Two Years) – As mentioned above, night shift differential is the higher hourly rate for shifts between 3 p.m. and 8 a.m. So, for example, if you work 500 night shift hours in 24 months and the differential rate is $7, then multiply these numbers to get your two-year differential pay:

$7 x 500 (hours) = $3,500

Step 3 – Calculate Your Overtime Pay (for Two Years) – As with differential pay, to determine your overtime pay for two years, you would multiply your overtime rate by the number of hours worked. If your overtime pay rate is 1.5 x ($52.50/hour) and you worked 250 hours of overtime, your calculation would look like this:

$52.50 x 250 (hours) = $13,125

Mortgages for Travel Nurses

Unlike staff nurses, travel nurses may have a more difficult time securing a home loan due to the nature of their work. That said, approvals and loan amounts are highly dependent on where you work and your work history and it is possible for travel nurses to get mortgages.

Explaining Employment Gaps

If you’re a travel nurse, there are likely gaps in your employment that result from a number of factors. Perhaps you’ve had a number of short contracts in your employment history. Perhaps you work per diem or have changed agencies in the past.

All of these scenarios do not mean that you are a bad employee with trouble maintaining work, but without a bit of context, a lender may misconstrue your career history as a negative.

These are a few ways to help give your lender some important context for understanding your career history:

  • Write a letter to your lender explaining the circumstances
  • Request a letter from your employer that explains that overtime and other non-standard will continue
  • Request a complete employment verification from agencies you’ve worked for previously
  • Provide two years of employment history as a traveling nurse
  • Provide 12 months of nursing experience and 12 months of traveling nurse employment history
  • Maintain a record of pay stubs, W-2s, year-end documentation, and other info relating to agency work

“Providing as many pay stubs to your lender as possible will be helpful in calculating qualifying income,” Lindley says.

According to Lindley, providing as much documentation, especially paystubs, will help your lender determine your income and to provide the best mortgage for your situation. “In many cases, providing the last pay stubs of the year for the previous two years will give a true breakdown of all payment types, giving the nurse a better chance of including all the ‘extra’ pay.”

Mortage Denial as a Travel Nurse

If you find that your mortgage applications are being denied, don’t give up. We recommend maintaining your employment with a single agency for two years to increase your chances for loan approval.

Home Buying as Long Term Investing for Travel Nurses

Even though as a travel nurse, you’ll likely spend less time in your home than other nurses, buying a home is still a good investment for a number of financial reasons and can be helpful later in life. When a travel nurse invests in a home, they will:

  • Build equity
  • Have access to deductibles on their taxes
  • Exercise more control over their living space
  • Stabilize their housing costs and regularize their budget

When Buying a Home, Understand How You Are Paid

As a nurse, you will have a lot of opportunities to earn and increase your earnings over time, but it’s important to understand how you are paid when buying a home. Do you know the different kinds of pay that show on your pay stubs? Do you understand the differences between overtime and differential pay? The average length of a mortgage is 30 years, so understanding how you are paid now will help you plan and forecast for your future and for your ability to maintain payments over that period.

What Are Your Financial Priorities?

Even if you want to own a home, is it your biggest financial priority? It might not be. And if it is, what are your other big financial priorities? Retirement? Starting a family? Do you want to go to graduate school for nursing? Before you start down the road of homeownership, it’s important to know where your priorities lie so that you can plan your financial future accordingly.

Be Smart About When You Buy a Home

According to Minority Nurse, even well-paid nurses struggle to make and maintain payments on large purchases. “Even if a purchase is appropriate for your life stage, try to minimize your total household overhead. Even well-paid nurses risk fatigue from worry or overwork to manage bills and payments for one-time splurges or ongoing financial commitments.”

If you decide that owning a home is the next step for you, understand the other major financial decisions that are in your future and recognize how buying a home will affect those purchases.

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Nursing Home Loan Assistance Programs

So, you’ve read up on the best practices for buying a home as a nurse or travel nurse and you’ve decided that buying a home is the right choice for you. Next, you’ll want to explore look for ways to reduce the cost of your mortgage. One way Nurses can reduce the costs of their mortgages is by using nursing home loan assistance programs. Below, we’ve listed 6 options you can explore.

Nurse Next Door Grants

Home loan assistance up to $6,000 is available for qualifying medical professionals, though, depending on availability, grants as low as $1,000 may be available. Depending on your situation, down payment grants up to $10,681 may be available.

Eligibility Requirements

The exact qualification criteria to qualify for this program will depend on which state you live in. In general, all professional medical staff will qualify. Grants are awarded for primary residences only and to medical professionals who do not already own a home. For more information, click here.

EveryDay Heroes Housing Assistance Fund (EHHAF)

The EveryDay Heroes Housing Assistance Fund (EHHAF) offers housing grants to police officers, firefighters, teachers, doctors, nurses, and social workers. With this program, you can get up to 97% Loan to Value (LTV) Ratio. If you are a veteran in one of these professions, you could even qualify for 100% financing.

Eligibility Requirements

The EHHAF does not publish any specific eligibility requirements in order to qualify for one of their grants. For more specific requirements info, click here.

Homes for Heroes

Registered nurses in California, Massachusetts, Hawaii, Oregon, or Alaska can make use of the Homes for Heroes program in order to buy their own house. This program discounts 25% of your realtor fee when buying a house. This applies as long as you use a realtor or broker who is affiliated with the Homes for Heroes program. You will also receive reduced inspection fees and closing costs.

After you purchased your house, Homes for Heroes will refund you 0.7% of the home purchase price. If you use a Homes for Heroes lender, you will also have additional savings on lending fees.

Eligibility Requirements

To be eligible for the Homes for Heroes program, you must be a registered nurse in California, Massachusetts, Hawaii, Oregon, or Alaska and use one of the Homes for Heroes affiliate agents. For more information about Homes for Heroes, click here.

Mortgages for Champions

Mortgages for Champions offers special home loans to various medical professionals, including home loans for registered nurses. One of the biggest perks to this program is the costs it eliminates, including loan application fees, loan processing fees, and mortgage underwriting fees.

Eligibility Requirements

Mortgages for Champions’ loans does not publicly share their loan eligibility criteria. If you want to get more information, you can contact them here, or you can apply and get a quote here.

FHA loans for Nurses

While FHA loans are not designed specifically for nurses, they do come with a number of advantages, including:

  • Being insured by the Federal Housing Administration
  • Having default protection that will cover your lender’s loss

Additionally, FHA loans are good for nurses with low credit scores, who are having a hard time producing a down payment, or who have lower incomes. For more information about FHA loans, click here.

USDA loans for Nurses

USDA loans are backed by the U.S. Department of Agriculture and are designed for borrowers who want to buy homes in rural areas. Like with other loans, there are some requirements:

  • You must live in a designated rural area
  • Your adjusted gross income cannot exceed 115% of the median income where you live
  • Your credit score must be at least 640

For more information about USDA loans, click here.

How to Get a Personal Loan for a Down Payment as a Nurse

As a nurse, your career is dedicated to caring for others, often leaving little time to navigate the complexities of financial planning, especially when it comes to making significant life purchases like buying a home. If you’re considering taking out a personal loan to help cover the cost of a down payment on a house, it’s essential to understand the ins and outs to ensure this financial move is as prudent and beneficial as your daily decisions in healthcare.

Step 1: Evaluate Your Financial Health

Before diving into the process of obtaining a personal loan, take a thorough look at your finances. As someone in the nursing profession, you may have a stable income and potentially some debt from nursing school. Consider your debt-to-income ratio, credit score, and current monthly expenses. A strong credit score can not only increase your chances of loan approval but also secure a lower interest rate, which is critical for long-term affordability.

Step 2: Research Lenders

Not all lenders are created equal, especially when it comes to personal loans. Look for lenders that offer competitive rates and terms that best fit your unique situation. As a nurse, you might even find that some financial institutions offer special terms or discounts for healthcare professionals, recognizing the stability and demand of your profession.

Step 3: Understand the Terms

Personal loans come with various terms and conditions. Interest rates can be fixed or variable, and loan terms can range widely. A shorter-term loan means higher monthly payments, but less interest over time. Conversely, a longer-term loan will have smaller monthly payments, but you’ll end up paying more in interest. As a nurse, your shifts and schedules can be unpredictable, so consider a loan with a term that aligns with your salary and budget.

Step 4: Calculate the Costs

Using a personal loan for a down payment means you’re borrowing money on top of a mortgage. This can be a hefty financial responsibility, and it’s crucial to calculate the total cost of the loan, including the interest and any fees. Tools like online calculators can help simulate your loan repayment plan. Ensure that the combined cost of your new mortgage and the personal loan doesn’t stretch your budget too thin.

Step 5: Pre-Approval and Application

Once you’ve selected a lender, getting pre-approved can give you a clearer picture of the loan amount you might qualify for and the interest rate. Gather all necessary documents — typically, lenders will want proof of income, employment verification, and a list of your debts and assets. For nurses, employment verification is usually straightforward due to the high demand for your profession, potentially working in your favor.

Step 6: Consider the Implications on Mortgage Approval

Keep in mind that taking out a personal loan right before applying for a mortgage can affect your credit score and the debt-to-income ratio that lenders consider. Some mortgage lenders may not approve your mortgage application if they see you’ve just taken on a new loan, as it suggests an increased risk. Discuss your intentions with a mortgage advisor to ensure that this strategy won’t hurt your chances of home loan approval.

Step 7: Make Your Down Payment

If all the pieces fall into place and both your personal and home loans are approved, you can make your down payment on your new home. As a nurse, time management is crucial, and this is no different when it comes to loan management. Ensure you keep track of your repayment schedules and stay on top of both loan obligations.

Next Steps

If your a nurse and you’ve decided to buy a home, you’ve already take the first step. Now that you’re equipped with the knowledge above, you can determine your total income, find the lender that meets your needs, and apply to assistance programs!

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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