Complete Guide to Home Loans for Nurses

If you are a nurse, let us start off by saying “Thank You”. As of writing this we are in the middle of the COVID-19 pandemic and all of you deserve the highest praise for all the work you are doing during these trying times. Hopefully we can help you just a little bit with this article as you help the world.

Most of you were probably drawn to the nursing field for a variety of reasons. Whether it was the meaningful work, the flexibility, the job security or a combination of many things – you decided to take the path less traveled. 

Unfortunately that may come with some drawbacks when trying to secure a home loan. 

Banks and mortgage lenders may see that flexibility in schedule and variety in pay as a risk when assessing a home loan application. The mortgage industry tends to prefer the most “stable” financial situations possible and oftentimes a nurse’s situation isn’t. 

Travel nurses can be an even larger hurdle in getting approved for a home loan. Constantly changing employers, employment gaps, overtime and student loans are just a few of the things that banks and lenders often dislike when assessing a home loan. 

But don’t worry – we are here to help!

If you are a staff nurse looking for a home loan then there is good news – it’s easier for you to get a home loan than it is for a travel nurse. 

Staff nurses with a stable and consistent paycheck shouldn’t have any problem getting a home loan. However, that does come with a caveat.

Typically a nurse’s base pay will be the only pay included in a home loan application. So that means if you work 3 – 12 hour shifts each week then that is what the bank or lender will accept as income. 

So that doesn’t include any overtime, shift differentials, etc. But the good news is that it is possible in some instances to include certain parts of that additional pay. 

If you have proof that the additional income has been occuring fairly regularly for over the last 2 years then you may be able to include certain things. 

For example, if you are a nurse who works night shift you most likely have a base pay plus a good shift differential added on for the night shift. If you have been working in this job for the past 3 years then your shift differential can be included in your home loan application

However, if you are a nurse that picked up some holidays this year and got overtime and shift differential for those days – you will not be able to use that income.

In the example above with the night shift nurse here is how to calculate the income that will be used in a home loan application:

Step 1: Calculate your current base pay and the number of hours that you’ll work per week. Let’s say your current base pay is $32 per hour and you work a guaranteed 36 hours per week (3 – 12 hour shifts) every year:

$32 x 36 hours x 52 weeks / 12 months = $4,992 per month

Step 2: Calculate your night differential as a two-year total. Let’s say you get night shift differential for every hour you work each year. So that’s a total of 1,872 hours per year at $5 extra per hour:

$5 x 1,872 hours / 12 months = $780 per month

Step 3: Add the two monthly numbers together to get your total qualifying income that can be used in a home loan application:

$4,992 + $780 = $5,772 per month

Travel nurses are oftentimes seen as a big risk for banks and mortgage lenders when assessing them for a home loan. The unstable income, changes in employers, employment gaps, overtime and student loans are all things that make a travel nurse “undesirable” for those lenders. 

However, we are here to help the travel nurses too! So here are some ways to overcome these hurdles. 

One of the biggest issues that banks and lenders have with the home loan applications of travel nurses are the gaps in employment. 

Travel nurses may have short contracts, various per-diem schedules or jump from company to company. Banks and lenders don’t like irregularities in employment history so here are the ways you can handle these variables:

• You can request a letter from your employer which explains how your shift differentials and overtime are likely to continue or have a company complete an employment verification for your past work.
• You can also write a letter explaining the nature of your work to your lender.
• Show a 2 year history of employment. If you have been a travel nurse for less than 2 years but you have been a travel nurse for one year, your previous staff nurse experience may still be acceptable. 
• Keep your pay stubs, W-2s and agency contact info, pay statements and year-end documentation from each agency you’ve worked for.

Are you a new graduate of nursing school and looking to purchase a home? Great! 

There are 2 ways that you can obtain a home loan fresh out of school. 

1. You can use your base pay as qualifying income 
2. You can wait 2 years and possibly qualify for more home

Lenders can consider your base pay fresh out of school due to the fact that school counts as work history. So if you were in school for the last 2 years you can qualify with just your base pay in most cases!

Even if you qualify for the home loan that you want there may still be some issues with the amount of money needed for things like your down payment. Luckily for you – there are a handful of programs out there that you may be able to qualify to get money from!

These aren’t loans or anything else that you need to pay back. These are grants, refunds and other savings that are completely free for nurses if they qualify.

The Nurse Next Door program is a tremendous program where ALL healthcare professionals including nurses, medical staff, doctors and healthcare support staff employees are eligible. This particular program has dedicated up to $20 Million in 2020 towards home buying grants for nurses and healthcare professionals. 

Here are just a few of the amazing benefits of the Nurse Next Door Program:

• Purchase ANY home on the market
• GRANTS up to $6,000.00 (Where available) 
• Down Payment Assistance up to $10,681.00
• Home loans for nurses and healthcare employees
• Simple Docs Program™ 
• NO application fees
• NO up-front fees
• NO Broker fees
• Preferred interest rates
• FREE appraisal (up to $545.00 credit at closing)
• FREE home buyer representation
• FREE access to (MLS) home listings
• FREE nationwide access to foreclosures
• Discount title fees
• Fresh Start credit repair program
• Simple Docs Refinance Program™

The Everyday Hero Housing Assistance Fund (EHHAF) helps everyday community heroes such as nurses, doctors, police officers, firefighters, etc. with free gift funds to help cover closing costs. 

These funds are completely free if you qualify and with closing costs typically ranging from 2-5% of the purchase price of the home – this can save you a lot!

There are numerous other options and programs out there to make your lives a little easier in the home loan process. 

If you want to reach out we would be glad to help give you the rundown of everything available for you!