Not long ago, locum tenens work was treated as a fringe choice — something a doctor did between jobs or in semi-retirement. That picture is out of date. The share of physicians currently working locums has nearly tripled over the past decade, from about 5% to 14%, and roughly 41% of physicians say they've done locum work at some point in their careers. An estimated 56,000 doctors now build their schedules this way, drawn by higher daily pay, more control over their time, and relief from burnout.
There's just one part of this lifestyle that tends to trip people up: getting a mortgage. The moment your income shows up on a 1099 instead of a W-2, conventional underwriting gets nervous. The good news is that physician mortgage programs were built for exactly this kind of borrower, and in 2026 they remain one of the cleaner paths to a home loan for contract physicians. Here's how it actually works.
Why 1099 income confuses a conventional lender
A traditional mortgage underwriter wants to see stability and predictability. For a salaried doctor, that's easy — there's a W-2 and an offer letter. For a locum or independent-contractor physician, the lender typically asks for two years of tax returns and then averages your net income, meaning income after all your business deductions.
That last part is the catch. Smart locum physicians work with a CPA to deduct travel, lodging, malpractice tail coverage, retirement contributions, and the qualified business income (QBI) deduction. Those deductions lower your tax bill — which is the point — but they also lower the income figure a conventional lender is willing to count. A doctor billing $400,000 a year can look, on paper, like they earn far less. It's entirely possible to be genuinely high-income and still get a thin or declined conventional approval.
How a physician mortgage treats locum income differently
Physician mortgage loans were designed around the reality of medical careers, and several lenders extend that flexibility to 1099 and locum doctors. The differences that matter most:
Contract income can count, sometimes without two years of returns. Some physician-loan lenders will qualify you on a signed contract — a locum or employment agreement that states a guaranteed rate or hourly pay and a set number of hours — rather than demanding a long history of tax returns. Lenders often also want a letter from the contracting hospital or agency confirming you bear no expenses to perform your duties. This won't be every lender, so it's worth shopping specifically for 1099-friendly physician-loan programs.
Student loans are handled sanely. Physician programs generally use your actual monthly payment under an income-driven plan when calculating your debt-to-income ratio, instead of the inflated percentage-of-balance figure conventional loans often apply. For doctors carrying six figures of student debt, this single difference can be what makes the math work.
The core perks still apply. That means 0% down and no PMI, with qualified borrowers (typically 700+ credit) able to access up to roughly $1 million with nothing down. For a locum physician who'd rather keep cash liquid between contracts, avoiding a large down payment is genuinely useful.
What to have ready before you apply
If you're a locum or 1099 physician planning to buy, a little preparation removes most of the friction:
- Your signed contracts. Current and recent locum agreements showing rate and hours. The clearer the guarantee, the easier the approval.
- Two years of tax returns, if you have them. Even when a lender will work off a contract, returns strengthen your file. If you're newer to locums, that's a reason to shop for the more flexible programs.
- A conversation with your CPA before you apply. Aggressive deductions help in April and hurt in underwriting. If a home purchase is coming, your accountant can help you think about that tradeoff in advance — not after the fact.
- Documented reserves. Lenders like to see cash to cover gaps between assignments. A few months of reserves reassures an underwriter that an income lull won't sink your payment.
- A strong credit profile. Best pricing in 2026 still favors scores in the 740+ range, and a higher score widens your lender options.
The market backdrop
As of June 2026, the 30-year fixed mortgage rate sits around 6.5%, and forecasts have rates hovering between roughly 6.0% and 6.4% over the next year. Inventory remains tight, with home prices expected to rise a modest 2%–3%. None of that is specific to locum physicians, but it's the environment you're buying into — and it makes locking in a clean, well-documented approval more valuable than waiting for a dramatic rate drop that forecasters aren't predicting.
The bottom line
Locum tenens work has earned its place as a legitimate, often deliberate career path — not a gap-filler. Your mortgage options have caught up, even if conventional underwriting hasn't. A physician mortgage that understands contract income, counts your real student-loan payment, and waives PMI can turn a frustrating 1099 approval into a straightforward one. The key is shopping for a lender that genuinely works with locum income, and walking in with your contracts, returns, and reserves organized.
MedPharmaConnect is an educational resource, not a lender. This article is for informational purposes only and isn't financial advice. Talk with a licensed mortgage professional and a tax advisor about your specific situation.
MedPharmaConnect is an educational resource, not a lender. Always verify program details, current rates, and eligibility with licensed mortgage professionals.