A locum hospitalist’s tax math:
Gross 1099-NEC from staffing agencies: $520,000
SEP-IRA contribution: $66,000 (maximum)
Malpractice insurance: $14,000
Continuing medical education (CME): $4,200
Medical licensing and DEA fees: $3,800
Professional society memberships: $2,400
Home office: $8,400
Total deductions: $98,800
Taxable income: $421,200
Conventional qualifying: $421,200 ÷ 12 = $35,100/month
1099 qualifying: $520,000 × 90% ÷ 12 = $39,000/month
Difference: $3,900/month = approximately $518,000 more qualifying loan amount
And this is for a physician who deducts less aggressively than many. Physicians with solo 401(k) structures, defined benefit plans, or aggressive CME and equipment programs show even larger gaps.
Locum Physician or Travel Nurse? Your Agency 1099s Qualify You.
Go Deeper
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Healthcare Contractor Profiles
Locum tenens hospitalist (MD/DO):
Income range: $380,000–$600,000/year from staffing agency 1099-NEC contracts (3–5 agencies typical). Hospital medicine is the highest-volume locum specialty. After SEP-IRA and deductions: qualifying income typically $260,000–$440,000. The 1099 program uses the $380,000–$600,000 gross.
Emergency medicine physician:
Income range: $450,000–$720,000/year locum. One of the most in-demand locum specialties due to ED staffing shortages. The 1099 advantage is at its largest for EM physicians — gross income is high and deductions are substantial.
Travel registered nurse:
Income range: $85,000–$165,000/year from travel staffing agency 1099. Many travel nurses also receive non-taxable housing stipends that are not 1099-documented and don’t qualify. The qualifying income is the documented 1099-NEC compensation only.
CRNA (Certified Registered Nurse Anesthetist):
Income range: $160,000–$310,000/year locum. One of the highest-earning nursing specialties. Clean 1099-NEC documentation from anesthesia staffing firms.
Physician assistant (PA) and NP locum:
Income range: $95,000–$195,000/year. Growing segment as hospital systems increasingly engage PA/NP locum coverage.
Travel Nurse Housing Stipend: Does It Qualify?
Travel nurses frequently ask whether their housing stipend qualifies as mortgage income. The answer requires careful examination.
Taxable housing stipend (1099-MISC): If the staffing agency includes housing compensation in a 1099-MISC, it is documentable income. Qualifying at 90%.
Non-taxable housing stipend (not 1099-documented): Housing allowances structured as non-taxable reimbursements do not appear on 1099 forms and do not qualify as mortgage income under the 1099 program.
The practical implication: A travel nurse earning $145,000 in 1099-NEC clinical compensation plus $32,000 in non-taxable housing stipend has qualifying income of $145,000 × 90% ÷ 12 = $10,875/month. The housing allowance, while real compensation, does not factor in.
Some travel nurses structure their arrangements differently — it’s worth reviewing your specific agency contract language with your loan officer to confirm which portions are documented on 1099.
1099 vs W-2 Healthcare Contractors
Some locum physicians receive W-2 compensation directly from facilities or through employer-of-record arrangements rather than pure 1099 contracts. The documentation and qualification differ:
Pure 1099 locum: 1099-NEC from staffing agencies. 1099 loan program. 90% qualifying.
W-2 locum: Pay stubs + employer verification from agency. Conventional income documentation. Full gross income qualifies under conventional DTI analysis (no deduction penalty applies).
Mixed 1099 and W-2: Both documented and combined. W-2 income through conventional documentation; 1099 income through 1099 program at 90%.
For physicians considering whether to take W-2 vs 1099 arrangements for the next engagement: W-2 arrangements are fully documented under conventional standards, which can be advantageous for mortgage qualification if the W-2 income is sufficiently high. The 1099 program is the solution when W-2 isn’t the compensation structure.
The Physician’s SEP-IRA Decision and Mortgage Timing
The maximum SEP-IRA contribution ($66,000 for 2026) is one of the most valuable tax deferral tools available to independent contractors. It’s also the single largest deduction that reduces conventional mortgage qualifying income.
The tension: Maximizing the SEP-IRA saves approximately $22,000–$28,000 in taxes annually (at the 33–40% effective federal rate for high-income contractors). It also reduces conventional qualifying income by $66,000/year = $5,500/month.
The 1099 program resolution: The 1099 loan uses gross 1099 income before the SEP-IRA deduction. The physician can maximize their retirement contribution without any penalty to their mortgage qualification.
This is one of the most concrete financial advantages of the 1099 loan for healthcare contractors: the retirement contribution optimization and the mortgage qualification optimization are no longer in conflict.
Locum Tenens and the 2-Year History Requirement
The 2-year contractor history requirement for the 1099 program requires documentation that you’ve been operating as an independent contractor for 2+ years. For locum tenens physicians:
Recently completed residency: If you completed training (residency/fellowship) within the last 24 months and immediately transitioned to locum practice, you may have fewer than 2 years of independent contractor history. Options: prior tax returns showing 1099 income during training moonlighting, CPA letter, or confirmation that your total independent practice history meets the threshold.
Prior staff physician transitioning to locum: If you worked as a hospital-employed physician (W-2) and transitioned to locum within the past 24 months, the 2-year contractor history starts from the locum practice initiation date. Your prior W-2 employment establishes physician credentials but not independent contractor status.
Discuss your specific transition timeline with your loan officer. Program structures vary.
Frequently Asked Questions
Can a travel nurse qualify for a mortgage using 1099 income?
Yes — 1099-NEC compensation from staffing agencies qualifies at 90%. Non-taxable housing stipends that don’t appear on 1099 forms do not qualify. The documented 1099 income is the qualifying income.
Does a locum physician need to submit a tax return?
No. The 1099 mortgage program uses 1099-NEC forms from staffing agencies. Tax returns are not submitted for income qualification.
Does the SEP-IRA deduction hurt my 1099 loan qualification?
No — the 1099 program uses gross 1099 income before the SEP-IRA deduction. You can maximize your retirement contribution without any penalty to mortgage qualification.
What credit score does a locum physician need?
640 minimum. 660 for 85% LTV. 720+ for best pricing.
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Healthcare 1099 Income by Specialty: Complete Reference
Average annual locum/travel income by specialty (2026 estimates):
| Specialty | Annual 1099 Range | 1099 Qualifying (90%, 12-mo) |
|---|---|---|
| Emergency medicine | $450K–$720K | $33,750–$54,000/mo |
| Hospitalist | $380K–$600K | $28,500–$45,000/mo |
| Anesthesiology (CRNA) | $200K–$380K | $15,000–$28,500/mo |
| Radiology (teleradiology) | $350K–$650K | $26,250–$48,750/mo |
| Psychiatry | $320K–$520K | $24,000–$39,000/mo |
| Physician assistant (PA) | $120K–$220K | $9,000–$16,500/mo |
| Travel RN | $85K–$165K | $6,375–$12,375/mo |
| APRN/NP | $120K–$210K | $9,000–$15,750/mo |
These ranges produce qualifying incomes that support primary residence purchases from $350,000 (travel RN) to $3M+ (high-volume EM physician) at standard DTI ratios.
Not a commitment to lend. Mbanc NMLS #38232 | Equal Housing Opportunity Lender
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Not a commitment to lend. Mbanc NMLS #38232 | Equal Housing Opportunity Lender. Programs subject to change. 1099-NEC, 1099-MISC, and 1099-K (net earnings) qualify. 1099-INT, 1099-DIV, 1099-R, and 1099-B do not qualify. 2-year independent contractor history required. Minimum 640 credit score. Maximum $4,000,000 loan. 24-state primary residence coverage, 46-state DSCR investment coverage. Rates and terms subject to change without notice.