Locum Doctor Mortgage: 0% to 10% Down for 1099 Physicians

About one-third of physicians have worked locum tenen positions, according to CompHealth. Whether you’re a recent grad testing the waters or a more long-term rotating locum doctor enjoying the flexibility of your schedule, you might run into issues when searching for a mortgage. Lenders can have strict income history requirements and other home buying barriers, such as providing a large down payment.

However, thanks to your degree and profession, you might be able to take advantage of an exclusive home financing program called a physician mortgage. You might still have some hurdles if you earn an independent contractor income, but some lenders are more 1099-friendly.

Read on to learn about the various benefits and obstacles of getting a locum doctor mortgage.

What is a locum doctor mortgage loan, and what are the challenges?

A locum doctor mortgage loan can provide 1099 physicians with special home financing opportunities that aren’t available to the general public. These physician mortgage programs come with down payment options as low as 0% and no private mortgage insurance (PMI) requirement — among other exclusive physician mortgage benefits including:

• Higher loan limits without a jumbo loan interest rate spike.
• Exclusion of student loan debt from your debt-to-income ratio (DTI) or a modified calculation using your actual income-driven repayment (IDR) monthly payment.
• Flexible income history requirements that benefit residents and physicians starting new positions.
• A variety of fixed rate and variable rate mortgage options with competitive interest rates (some of which are currently lower than conventional mortgage rates).

Traditional mortgage programs typically require at least two years or more of 1099 income and tax returns for self-employed borrowers to prove their income is consistent and reliable. This can be an obstacle for seasoned physicians who’ve recently transitioned into independent contractors, as well as new physicians holding over in a locum tenen role until the right full-time position comes along.

Fortunately, some lenders recognize these additional barriers to being self-employed and are willing to work with 1099 physicians to buy a new home.

5 Best mortgage lenders offering locum doctor mortgage loans

Here’s a list of locum doctor mortgage loans that have more flexibility in terms of 1099 income. Note that mortgage providers are listed alphabetically, and contact information is included for loan officers specializing in physician mortgage loans.

1. Berkshire Bank

A doctor home loan with Berkshire Bank is available to physicians who’ve been out of residency for less than 10 years. Independent contractors (including locum doctors) can qualify with less than 12 months of 1099 income.

This physician mortgage program provides up to 100% financing for loan amounts up to $1 million. Loan amounts are available for up to $2 million with a low down payment.

States available: NY, ME, NH, VT, MA, RI, FL, and CT

Contact: Stephen Morrison

2. Fifth Third Bank

The physician mortgage program with Fifth Third Bank offers a variety of low down payment options, ranging from 0% to 10% down, depending on where you’re at in your medical career.

This lender is willing to work with physicians to provide a locum doctor mortgage loan. But some parameters might require additional discussion.

For example, if you’re strictly earning 1099 income with a locum tenen employment agreement, your mortgage application will generally be more straightforward. However, if you’ve also created your own business (e.g., S-Corp), then you’ll likely need two years of tax returns and a more detailed review of your individual situation.

States available: FL, IL, IN, KY, MI, OH, TN, WV, GA, NC, SC

Contact: Email Sandy Salas.

3. Huntington National Bank

Huntington National Bank’s physician mortgage commonly requires medical professionals to have at least 24 months of income history. However, exceptions are made on a case-by-case basis for 1099 physicians who don’t necessarily meet this requirement.

Home financing decisions are generally based on the strength of the loan file, previous earning history and other financial markers. Therefore, employed locum doctors should reach out directly to discuss their unique scenario.

Qualified borrowers with a minimum credit score of 700 can access up to $1 million with 0% down. However, other low down payment options and financing opportunities are available for borrowers with scores above 680.

States available: AR, CO, CT, DE, FL, GA, IA, ID, IL, IN, KS, KY, MA, MD, ME, MI, MN, MO, MT, NC, ND, NE, NH, NJ, NM, OH, OK, OR, PA, RI, SC, SD, TN, UT, VA, VT, WA, WI, WV, WY

4. S&T Bank

S&T Bank’s physician loan program works with doctors across the country, including newly self-employed physicians, to provide a locum doctor mortgage.

However, this lender doesn’t offer up to 100% financing. Instead, qualified locum doctors can access loan amounts in the millions (no maximum loan amount) with a 5% down payment.

Note this program isn’t available to home buyers in Texas or New York. But all other states are eligible.

States available: AL, AK, AZ, AR, CA, CO, CT, DE, DC, FL, GA, HI, ID, IL, IN, IA, KS, KY, LA, ME, MD, MA, MI, MN, MS, MO, MT, NE, NV, NH, NJ, NM, NC, ND, OH, OK, OR, PA, RI, SC, SD, TN, UT, VT, VA, WA, WV, WI, WY

5. FNBO Mortgage (First National Bank of Omaha)

A physician home loan with FNBO Mortgage will require at least two years of filed tax returns for self-employed locum doctors.

But if you qualify, you can access loan amounts up to $850,000 with 0% down. If you’re willing to provide a low down payment (e.g., 5% to 10%), you could get $1.25 million to $1.5 million in financing.

States available: CO, IA, IL, KS, MO, NE, SD, TX, WY

Is a locum doctor mortgage loan right for you?

Depending on the period of time you’ve been doing locum work and other financial factors, a locum doctor mortgage could be both beneficial and more attainable than other types of mortgage options.

In some cases, lenders might be willing to work with you simply by providing a locum tenen employment contract that clearly details your 1099 compensation. Depending on your business structure as a locum physician, additional financial requirements might come into play during the application process when evaluating your eligibility.

That being said, many mortgage lenders are adapting to changes in the professional landscape as more people move into independent contractor roles. So, it’s worth reaching out to the lenders listed above, as well as other doctor mortgage lenders, to discuss your employment and financial situation directly.

Alternatively, you can fill out the form below to start receiving physician mortgage quotes for your next purchase or refinance.