Nursing is among the most rewarding career paths you can enter, providing expertise, comfort, and care to people during the most difficult and even the most joyous moments of their lives.
Considering all that nurses give, it seems only right that they get something in return -- especially when it comes to buying a home.
After all, nurses deserve a sanctuary for themselves and their families, a place where they can recharge and build health and wealth for their own futures.
Unfortunately, it’s sometimes tricky for nurses to apply for mortgages if they have non-traditional pay structures.
But Fairway Independent Mortgage Corporation’s home loans for nurses’ program is more than up to the challenge.
When you apply for a mortgage through Fairway’s program, you work with a company that understands nurse pay structures and isn’t afraid of a little complexity.
Even better, qualified nursing borrowers can get a loan with as little as 3% down plus up to $3,099 in additional assistance toward buying your first home.
Find out what you qualify for. Start here.
Proof of income is one of the biggest factors a lender will use to approve you for a mortgage. They need to verify that you can afford the monthly mortgage payment on the home you want to buy.
Documenting income can be challenging for nurses or nursing students because they sometimes have different pay structures than homebuyers who work a set number of hours on the same schedule for the same rate of pay each week.
For instance, you might earn base pay plus shift differentials when you work nights, holidays, or other shifts. Whether you can use the differentials toward your qualifying income depends on how long you’ve been earning that income, and the way lenders calculate that pay is different from how they look at base pay. Same goes for overtime.
If you’re a travel nurse, you’ll need to prove not just your income but your work history, since lenders need to see two years of employment and your work history probably looks different from most homebuyers’, and even from that of staff nurses.
You can see how the mortgage landscape gets complicated for nurse borrowers.
But Fairway’s Nurse Loan program is designed specifically for nurses. That means you’ll work with a loan officer who can simplify and support you through the process and who’s not afraid of the complexity of your application.
More importantly, though, the Fairway Nurse Loan program can help you get into a home with less money upfront -- that means more cash in your pocket to buy new furniture, pay for upgrades, and make your new home your home.
Here’s how it works.
The Fairway Nurse Loan program combines features from the Freddie Mac BorrowSmart℠ program with Fairway-exclusive perks to give you:
- 3% down payment option on a Freddie Mac HomeOne® or Home Possible® conventional loan
- Up to $2,500 in down payment assistance, depending on your income
- $500 credit toward your appraisal fee, or covering the appraisal (whichever is lower)
- $99 credit toward the cost of the required BorrowSmart credit counseling course
The BorrowSmart program provides down payment assistance to help deserving homebuyers become homeowners. Saving up a down payment is one of the biggest hurdles to homeownership, and this program makes it easier for borrowers who can afford a monthly mortgage payment to come up with that initial lump sum.
BorrowSmart is not a loan program, but rather can be combined with a Freddie Mac HomeOne or Home Possible loan. These are low-down payment conventional loan offerings that allow qualified buyers to purchase homes with 3% down.
Let’s say you find the perfect home, and the purchase price is $230,000. A 3% down payment is $6,900. Depending on your income, you could receive up to $2,500 through BorrowSmart, reducing your out-of-pocket expense to $4,400.
That’s still a lot of money -- but Freddie Mac allows you to use gift funds toward the down payment. If you have family or friends who want to help you buy your home, a down payment gift is a great way to do it. Even contributions of $200 or $500 can make the down payment more manageable.
And it gets better. Home Possible borrowers can also put “sweat equity” toward the down payment. Sweat equity refers to making repairs or renovations on the home yourself before closing. So if you have limited savings but are willing to put in some work on the property, sweat equity could be a way to close the down payment gap.
✓ Use with 3% down HomeOne or Home Possible loans
✓ Up to $2,500 in down payment assistance through Freddie Mac BorrowSmart
✓ Gift funds allowed for remainder of down payment
✓ Sweat equity allowed toward down payment for Home Possible borrowers
✓ Up to $500 appraisal credit
✓ $99 toward BorrowSmart credit counseling
You’ll also need to meet general borrower criteria for the Home Possible and HomeOne offerings which include having a credit score of at least 620, a debt-to-income ratio (DTI) of 45% or less, and a solid credit history.
BorrowSmart provides the down payment assistance and Fairway will coordinate the transfer to the required home buyer counseling course.
Where Fairway comes in
BorrowSmart provides the down payment assistance. But Fairway offers additional savings of up to $599 through two Fairway-exclusive perks. Fairway will give qualified borrowers a $500 credit toward their home appraisal, or we’ll pay the appraisal fee (whichever is less).
We’ll also cover the $99 fee for the credit counseling course all BorrowSmart homebuyers must complete before their loans can close.
Bonus: If you don’t qualify for the BorrowSmart program but you move forward with a different loan program with Fairway, you’ll still get an appraisal credit up to $500.
HomeOne vs Home Possible
The HomeOne and Home Possible loan offerings are similar in that they’re both 3% down payment conventional loans offered by Freddie Mac. But there are some differences.
|At least one borrower must be a first-time homebuyer||No first-time homebuyer requirement|
|No income limits||Income must be 80% or less of area median income (AMI)|
|Home must be primary residence||Home must be primary residence|
|Gifts allowed toward down payment||Gifts allowed toward down payment|
|Sweat equity not allowed toward down payment||Sweat equity can be used toward down payment|
|*Private mortgage insurance required until 20% equity||*Private mortgage insurance required until 20% equity|
The biggest difference between these two mortgage offerings is the income requirement. If you don’t know which you might qualify for, not to worry. A Fairway loan officer can figure it out for you when you get preapproved.
Ready to apply now? Connect with a Fairway loan officer here.
*Private mortgage insurance (PMI) applies to conventional loans when the borrower’s down payment is less than 20%. Once you achieve 20% equity in the home, you can request that your lender remove the PMI requirement. PMI ends automatically at 22% home equity.
The BorrowSmart program aims to help very low- to low-income borrowers become homeowners.
Nurses at all levels of the profession can apply for the program, even recent nursing school graduates and those still in nursing school. That can provide a significant boost toward homeownership if you’re new to the profession and are not a high-earner.
A key feature of the BorrowSmart program is the down payment assistance option, and how much you qualify for depends on your income.
MODERATE-INCOME PURCHASE (MIP):
- Above 80% AMI and at or below 100% AMI
- Purchase property must be in high needs tract
- HomeOne program only
- Down payment assistance: $1,000
LOW-INCOME PURCHASE (LIP):
- Above 50% AMI and at or below 80% AMI
- Home Possible program only
- Down payment assistance: $1,000
VERY LOW-INCOME PURCHASE (VLIP):
- At or below 50% AMI
- Home Possible program only
- Down payment assistance: $2,500
Don’t know your local AMI? That’s OK -- most people don’t. You can look it up on Freddie Mac’s Income and Property Eligibility Tool.
And if you’re not sure whether you qualify, apply anyway. A Fairway loan officer will help you through the process and let you know your eligibility.
If it turns out your income is too high for the BorrowSmart program, they’ll tell you which programs are an option for you -- and you’ll still get the $500 appraisal credit so you can save money on your closing costs.
HomeOne and Home Possible loans apply to several property types:
- Single-family homes
- Multifamily homes with up to four units
- Planned unit developments
Home Possible borrowers can also purchase manufactured homes, though this is not an option with HomeOne.
Here’s the cool thing about multifamily homes: you can use them to jumpstart your investment portfolio. One of the units must be your primary residence, but you can rent the others out and use the rental income to offset your mortgage payments or build up your investments and savings.
The BorrowSmart program is available in all 50 states.
If you live in a state where BorrowSmart is not available, you may still qualify for a HomeOne or Home Possible loan, or another type of mortgage.
Your loan officer and loan processor will tell you exactly what they need to send your application to Underwriting for approval. But it helps to get organized before you apply. The faster you can submit your documents, the sooner you’ll get a response.
It’ll also help your peace of mind. There’s nothing fun about sending your documents piecemeal and fielding 50 different requests from your loan officer. Having your financial statements ready to go will make your life a whole lot easier, and you’ll get to spend more time thinking about what you want in your new house than about where you stashed your pay stubs.
So, what do you need to document your nursing income? It depends on how you’re paid.
You can use your base pay to qualify for a home loan as soon as you begin your job. Lenders want to see two years of employment, but if you recently finished nursing school and just started a new job, you’re still in luck.
Nursing school counts toward your employment history, so as long as you were in school for at least two years prior to starting your new role, you should clear the employment verification hurdle just fine.
Remember that the BorrowSmart program is income-based, so eligibility depends on how much you earn -- but also where you live.
In Evanston, Ill., 80% of AMI is $72,960. One state over in Iowa, a homebuyer in Iowa City could earn up to $76,560 and still be within the Home Possible limit. And in Kentwood, La., Home Possible eligibility tops out at $48,400.
So income limits vary substantially across the country.
But even if your income is too high for a Home Possible mortgage, you may still qualify for HomeOne, which has no income limits.
To document your base pay, hang onto any tax forms and pay stubs that show your regular wages. If you're new to the position, keep your offer letter from your employer and your employment contract handy to show proof of employment if your lender requests it.
Maybe you often work overtime or take on shifts with a higher hourly pay rate. You may be able to use that income toward qualifying for a loan, though it comes down to how long you’ve been earning those additional wages.
If you recently started your job and pick up higher-paid shifts here and there, you likely won’t be able to use overtime or differentials. Your lender will want to see two years of income history to count that as qualifying income.
But if you’ve been at your current job for a couple of years and earn shift differential rates fairly consistently, you may be in business. As with all aspects of your financial profile, though, documentation is everything. Having pay stubs from the past several months, as well as your final pay stub from the previous year, can go a long way toward showing that you’ve been earning a particular income for awhile and will likely do so going forward.
You may be able to use overtime or shift differentials if you’ve been on the job less than two years as long as your employer submits a letter backing the information up.
Travel nurses may have the most complex income verification scenarios of all nurses. But if you’re a travel nurse, you can absolutely buy a home -- it just comes down to showing your employment and income history.
The more work history you can show, the better. If you’ve been steadily working as a travel nurse for two or more years, that reassures lenders that you earn consistent income and will likely be able to afford your home loan.
You will likely need at least one year of documented work experience to qualify as a travel nurse. But that doesn’t all have to be from travel nursing jobs. If you were a staff nurse prior to becoming a travel nurse, you may be able to use that as qualifying employment history.
If you’re thinking of buying a home, the best thing you can do is keep meticulous records. Document the agencies you’ve worked with, including contact information for someone there who can vouch for your work history. Keep pay stubs, W2s, and tax returns as well.
Most mortgage programs available to nurses are the same as those for other homebuyers, including conventional, FHA, USDA, and VA loans. However, there are programs that can help nurses qualify for their mortgages, such as the Nurse Next Door grant program and Fairway’s Nurse Loan Program that offers exclusive perks on top of down payment assistance through Freddie Mac’s BorrowSmart program.
Some lenders offer home loan programs specifically for healthcare workers, though the specifics vary by lender, program, and profession. Fairway offers a Nurse Loan Program, as well as a Physician Loan for doctors, medical residents, dentists, veterinarians, and many other medical professionals and specialists.
Yes, you can. Some mortgage lenders offer programs specifically geared toward nurses. But there are a range of mortgage programs, both conventional and government-backed, that provide homeownership opportunities to borrowers across the income and credit spectrums. The key factors in qualifying for a mortgage is proving your income and employment, and meeting the borrower criteria of a particular loan program.
Buying a home can be a little more challenging as a nurse, but not with the right lender. Working with a mortgage company that understands the nuances of nurse pay structures can give you a hassle-free homebuying experience in which you’re supported from day one.
If you’re ready to get started, contact Fairway today to start down the path to the home you deserve.