– Closing the gap
December 1st, 2015

By Marcia Noyes | Winter 2015 |

Physicians share how they’re handling home buying, family starting and retirement planning along with the reality of student loan debt. Indebted graduates find that the added weight of student loans can make their choices about what comes next in their lives all the more arduous. That holds even more true for new physicians- especially those who delayed decisions about home purchases, retirement planning, marriage and starting families in favor of finishing training first.

One company working to provide a way for doctors to get into a home of their own is PhysicianLoans.

Tal Frank, president of PhysicianLoans, the specialty division of Tower Mortgage Corporation, says their family business started in 1993 when three disparate things happened near the same time. His mother, then president of the company, closed a loan for a physician client using a precursor to a true physician loan. At the same time, Frank’s younger brother was in medical school while Frank attended Ohio State and also worked for the mortgage company.

“One day, my marketing professor said something that just clicked with me: ‘Above all else, you must understand the power of serving a niche,'” says Frank. “Once we saw how this particular loan went, we then actively pursued special mortgage financing that accepted the IBR student loan financing.” The loans started out at five percent of their business and gradually grew. Frank says that physician loans now account for more
than 95 percent of total revenue.

“A true physician loan is a portfolio loan, and there’s no secondary market for those – meaning that they are not sold back and forth like other mortgages,” explains Frank. “Many banks want to get into this space, but they can’t do a large volume of portfolio business, because it must sit on their books.”

Frank says that those who use PhysicianLoans fall into two categories: those who are graduating medical school or residency, and those who have finished residency and are now practicing.

Physicians within these two groups typically need special financing because they don’t have cash for down payments and have much more student loan debt than those in other professions.