Mortgage industry professionals’ pride in certain traditions of goodwill can assist the military or other so-called workforce homebuyers, including doctors, through more accessible, more affordable loan options. And recent examples involve social awareness.
Marketing efforts made possible by Facebook Causes helped start Operation Home Relief launched on HouseLogic.com where the National Association of Realtors united with the nonprofit USA Cares Inc. to provide counseling about all aspects of homeownership, increase foreclosure awareness, and rally financial support and housing grants to post-9/11 active duty military personnel. The campaign matched every $1 donated online with up to $131,000 for a military family. By the end of February over 85,000 people from all walks of life had joined the cause. ACA International, the association of credit and collection professionals, is offering support to military personnel under the Servicemembers Civil Relief Act including mortgage assistance.
Audrey Bullock of Re/Max 100 and Jim Webster of SunTrust Bank started an alliance to help the medical workforce in the Washington metro area where similarly to many other areas of the country, there is a shortage of physicians. Over 2010 they succeeded to help relocate a number of physicians through the Doctor Loan Program. Other such homebuyers are currently considering the program, which offers strong incentives “to lure more physicians to the area, alleviating the current and growing shortage of physicians.”
It may seem far fetched but according to Bullock, whose specialties include corporate relocation, first-time homeownership, military and base realignment and closure relocation, a stress-free as possible home buying experience is a big incentive especially for these types of buyers. Even affordability is an issue since the perception is that it is not an issue for a physician. In fact, most medical school graduates owe an average of $156,000 in school loans when they graduate. By the time physicians start to practice medicine their debt-to-income ratio tends to be very high, yet they cannot easily qualify for affordable mortgages.
DLP created by SunTrust was triggered by a social concern. The bank said it responded to the medical community, area hospitals and local government agencies facing either the alternative of “stiff competition to recruit top doctors” or longer waits for appointments, specialists and emergency rooms. Media reports describe the shortage as a crisis that will deepen. By 2014 another 33 million uninsured Americans are expected to enter the health care system under the new health care law. The Association of American Medical Colleges estimates it will double the shortfall to 63,000 and up to 150,000 by year 2025. So the Maryland State Medical Society, MedChi and Maryland Hospital Association urged area lenders “to take bold steps to attract qualified physicians” including affordable homes even though that is challenging.
SunTrust created DLP both as a special fixed-rate and an interest-only adjustable-rate mortgage option for purchases and refinancing. It provides 100% financing to medical residents, interns and fellows on loans of up to $417,000. Student loans are deferred so they do not count as debt. For licensed medical physicians who have completed their residency in the past six years, the program offers 100% financing on loan amounts of $650,000, up to 95% financing on $1 million loans, and 89.9% financing on loans up to $1.5 million. Plus exceptions from these requirements are always possible “depending on circumstances.” Private mortgage insurance is not required and up to 3% of closing costs can be paid by the seller, or a gift from other sources.
