You are a physician. You are also, as far as the tax code is concerned, a small business. You get a 1099, you pay your own quarterly taxes, and you have been told by two lenders that you need two years of returns before anyone will talk to you about a house.
Meanwhile your W-2 colleagues down the hall are closing on houses before their first shift.
There is a path, and it is specific.
The contractor rules
Under CMG Financial's MedPro Premier guidelines (NMLS #1820, revised 09/11/2026), medical professionals hired as a contractor or 1099 employee may use projected income, subject to all of the following:
- You must have a fully executed employment contract.
- The contract must specify your rate of compensation, whether salary, hourly wage, pay per unit, pay per assignment or pay per production measure, and provide sufficient information about the minimum amount of work, hours, units, assignments or production expected to be available to you.
- It must contain enough information to reasonably determine the minimum income expected during the first 12 months of employment.
- A satisfactory letter from the hospital, clinic or contracting entity, or the contract itself, must confirm that you are not responsible for any unreimbursed business expenses required to perform your contracted duties, either explicitly or clearly supported by the contract terms.
- The start date must be within 60 days of loan closing.
Note that normal professional expenses such as licensing fees, continuing education and professional association dues are excluded from the expense confirmation requirement. It applies only to expenses necessary to perform the contracted work that could materially affect qualifying income.
The two requirements that fail most often
The expected volume language. A locum contract that says a rate per shift and nothing about how many shifts is not enough. The contract has to support a minimum income figure for twelve months. A rate alone does not. Get an addendum or a letter from the agency stating expected volume, and get it before you apply.
The expense confirmation. Most locum arrangements do involve expenses. If the contracting entity covers travel, lodging, malpractice and licensing, say so in writing on their letterhead. If the contract already makes that clear, point to the clause. If neither is true, this is the requirement that stops the file.
The line that changes everything
Here it is, and it is the reason to read your prior year return before you do anything else:
If you filed taxes using 1099 income in the previous year, you must qualify under standard self-employment guidelines.
And the follow-on: if those returns show unreimbursed business expenses, a letter cannot be used to document that there are none.
So there are two completely different files here.
A physician moving from a W-2 residency into a first 1099 position has no 1099 filing history. Projected income on the contract is available, subject to the requirements above.
A physician who has been doing locum work for two years has filed Schedule C. They are underwritten under self-employment guidelines on net income after expenses, exactly like any other business owner. The contract does not rescue that, and a letter cannot contradict the return.
Most locum physicians are in the second group and are told they are in the first, which is how files die in week four.
If you are in the second group, this is good news
Being underwritten as self-employed sounds like a demotion. It frequently is not, because the self-employed world has documentation options the physician program does not.
Bank statement qualification. Twelve or twenty-four months of personal or business statements, with an expense factor applied by business type and employee count. For a solo physician contractor with almost no real overhead, a service business with no employees carries the lowest expense factor in the table.
Third-party prepared 12-month profit and loss, validated against business bank statements, with depreciation, depletion, amortization, casualty losses and other non-recurring expenses added back to net income.
Written verification of employment, where the contracting entity can verify directly.
A locum physician with real deductions on a Schedule C can qualify for dramatically more on a bank statement calculation than on the net income line of that same return. Nobody runs the comparison unless you ask, because it requires carrying both product sets.
The eligibility that still applies
Whichever route you land in, the designation requirement does not move. At least one qualifying borrower must hold an eligible designation: MD, DO, DDS, DMD, Ophthalmology, Psychiatry, PharmD, DVM or VMD, DPM, CRNA with a DNAP or DNP, or Nurse Practitioner with an MSN or DNP, as a medical professional in active practice. No exceptions nor alternatives are considered, and the investor will not consider profession exceptions.
Do this in order
- Pull last year's tax return. Find out whether you filed 1099 income.
- If you did not, read your contract against the five contractor requirements above and fix gaps before applying.
- If you did, stop treating this as a physician loan question and price the self-employed routes: bank statements, third-party P&L, and full documentation, all three.
- Either way, get the expense confirmation in writing early. It is the requirement that most often arrives too late.
Common questions
Can a locum tenens physician get a physician loan? Yes, if you have no 1099 filing history yet. With a fully executed contract specifying compensation and expected volume, confirmation you carry no unreimbursed business expenses required for the work, and a start date within 60 days of closing.
What if I already filed a return with 1099 income? Then you must qualify under standard self-employment guidelines, and a letter cannot be used to document that there are no unreimbursed business expenses if the returns show them.
How close to my start date do I have to close on a 1099 contract? Within 60 days, which is much tighter than the 150 day window that applies to a W-2 employment contract or offer letter.
Is being self-employed worse for qualifying? Not necessarily. Bank statement and third-party P&L documentation frequently produce higher qualifying income than the net income line of a Schedule C with real deductions on it.
Do licensing fees and continuing education count against me? Those are expressly excluded from the unreimbursed business expense confirmation. The requirement applies to expenses necessary to perform the contracted work.
Related reading
- Physician and medical professional home loans, the full index for this topic
- Buying Before Your Start Date: The Contract and Reserve Rules for Physicians
- Dentist Home Loans: How DDS and DMD Borrowers Buy Before the Practice Is Established
- Self-Employed Home Loan FAQ: What Actually Qualifies a Business Owner
Why bring this file to us
- We find out which rulebook you are in before we apply. One line about how you filed last year decides whether you are a physician file or a self-employed file.
- We read the contract for the expense confirmation, which is the requirement locum physicians fail most often.
- We can run the self-employed routes too. If you land there, bank statement and P&L documentation are frequently better than the physician program would have been.
- Broker model. Multiple investors rather than one bank's shelf, which is what a file like this needs when the first answer is no.
- You talk to the principal. Ricky Khamis is President of EPiQ Lending and a Certified Mortgage Planner, NMLS #173141, originating mortgages since 1999. Direct line: (480) 999-9842.
EPiQ Lending is NMLS #1936984, at 7975 N. Hayden Road, Suite A-101 in Scottsdale. Verify all of it before you trust any of it: Ricky's EPiQ Lending profile, the Scottsdale branch, and the license itself at NMLS Consumer Access. Hold every lender to that standard, including us.
Send me last year's return and this year's contract. Which of those two documents governs your file is the entire question, and it takes one look.
Program figures in this post come from the CMG Financial (NMLS #1820) guideline set named above, as published on the revision date given. CMG Financial is the parent company of EPiQ Lending. These figures describe one investor's program at one point in time. Other investors price and underwrite the same borrower differently, guidelines change without notice, and nothing here is an offer of any specific program or terms. Confirm current eligibility on your own file before you plan around any of it.
Equal Housing Opportunity. This is general information, not a commitment to lend or an offer to extend credit. Rates, terms, and program guidelines change and depend on credit approval, property appraisal, income and asset verification, and other qualifying factors. Not all applicants will qualify. Non-QM, asset-based and business purpose financing carry different pricing, terms and consumer protections than agency financing. Consult your tax advisor regarding the tax treatment of any income or distribution strategy.
Find out what you qualify for before you start looking
Tell me where you are in training or practice and I will tell you which structure fits your file, what it needs, and what it does not. No credit pull to have the conversation.
