Commercial Loan Licensing
True Commercial Mortgage Loans
The following states may require licensing to originate commercial mortgage real estate loans. On this page I am defining commercial mortgage loans to mean a loan secured by real estate that is not a residential 1 to 4 family dwelling. Contact us if you need assistance with licensing.
We handle commercial mortgage licensing in these states:
Illinois Loan Broker
Nebraska Loan Broker
Nevada (Company and LO)
South Dakota (Company and LO)
These states show that a license may be required, but the states don’t know how to obtain it from them:
District of Columbia
We don’t handle these states. Contact the Divisions of Real Estate directly in these states:
Michigan (Real Estate Broker) – Brokering Only
Minnesota (Limited Real Estate Broker) – Brokering Only
New York (Real Estate Broker)- Brokering Only
New Jersey (Real Estate Broker)- Brokering Only
Most companies are exempt in this state. See below:
Florida (Company and LO)
No Longer Required
Hawaii (No longer required as of 1/1/2011)
Business Purpose Residential Mortgage Loans
People often refer to non-owner occupied business purpose residential mortgage loans as commercial loans. Again, that is not what I am referring to above on this page, however if you are interested in doing non-owner occupied business purpose residential mortgage loans, the following states may require licensing:
Alabama, Arizona, California, Colorado, Florida, Idaho, Illinois, Louisiana, Michigan, Minnesota, Nevada, New Jersey, North Dakota, Oregon, Rhode Island, South Dakota, Texas, Utah, and Vermont.
Here are excerpts from some of the states laws regarding commercial mortgage licensing.
“Mortgage loan” means a loan secured by a mortgage or deed of trust or any lien interest on real estate located in this state created with the consent of the owner of the real estate.
Arkansas – Only required if also originating residential
Exempt person includes any of the following: A person who brokers, makes, or services mortgage loans if the only mortgage loans that the person brokers, makes, or services in Arkansas are nonresidential mortgage loans.
“Finance lender” includes any person who is engaged in the business of making consumer loans or making commercial loans.
(21) “Mortgage broker” means a person conducting loan originator activities through one or more licensed loan originators employed by the mortgage broker or as independent contractors to the mortgage broker.
(16) “Loan originator” means an individual who, directly or indirectly, solicits or offers to solicit a mortgage loan, accepts or offers to accept an application for a mortgage loan, negotiates or offers to negotiate the terms or conditions of a new or existing mortgage loan on behalf of a borrower or lender, or negotiates or offers to negotiate the sale of an existing mortgage loan to a noninstitutional investor for compensation or gain.
(23) “Mortgage loan” means any:
(a) Residential loan primarily for personal, family, or household use which is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling, as defined in s. 103(v) of the federal Truth in Lending Act, or for the purchase of residential real estate upon which a dwelling is to be constructed;
(b) Loan on commercial real property if the borrower is an individual or the lender is a noninstitutional investor; or
(c) Loan on improved real property consisting of five or more dwelling units if the borrower is an individual or the lender is a noninstitutional investor.
Institutional Lender: Financial institution that invests in mortgages typically carried in its own portfolio, such as a savings association, commercial bank, life insurance company, pension and trust funds.
The following definition was changed to include only residential mortgages on 1/1/2011. There is no longer licensing in Hawaii for Commercial Mortgage Companies. Old Law stated – “Mortgage Broker” means a person not exempt under sectin 454-2 who for compensation or gain, or in the expectation of compensation or gain, either directly or indirectly makes, negotiates, acquires, or offers to make, negotiate, or acquire a mortgage loan on behalf of a borrower seeking a mortgage loan. “Mortgage loan” means a loan secured by a mortgage on real property. No exemption for commercial loans under the act.
Kansas – Required for loans over 12%
‘‘Supervised lender’’ means a person authorized to make or take assignments of supervised loans, either under a license issued by the administrator (K.S.A. 16a-2-301 and amendments thereto) or as a supervised financial organization (subsection (44) of K.S.A. 16a-1-301 and amendments thereto).
‘‘Supervised loan’’ means a consumer loan, including a loan made pursuant to open end credit, with respect to which the annual percentage rate exceeds 12%.
Licensing by the State Treasury Department. Contact: Diane Spurling (225) 342-7004
Required State License(s):
1) Mortgages on residential properties of four units or less (or land which is being developed for such a use) — requires a license or registration with the Mortgage Brokers, Lenders, and Servicers Licensing Act or Secondary Mortgage Loan Act, Department of Insurance and Financial Services, Consumers Finance Section at 877-999-6442 or visit the website at: www.michigan.gov/difs.
2) Mortgages on other property, such as commercial property or residential properties or more than four units — requires a license from the Board of Real Estate Brokers and Salespersons.
Licensed by the Real Estate Division with a Limited Real Estate Broker License. Contact them at (651) 296-6319. Effective August 1, 2008, commercial loans if secured by a 1-4 family residential property will be covered under the Residential Mortgage Originator and Servicing Act.
Subd. 13.Limited broker’s license.
The commissioner shall have the authority to issue a limited real estate broker’s license authorizing the following limited activities:
(1) the licensee to engage in transactions as principal only; or
(2) the licensee to engage in negotiations of mortgage loans, other than residential mortgage loans, as described in section 82.55, subdivision 19, clause (b).
The license may be issued only after receipt of the application described in section 82.58, subdivision 2,and payment of the fee prescribed by section 82.57, subdivision 1. A salesperson may not be licensed to act on behalf of an individual holding a limited broker’s license. A responsible person of a business entity licensed as a limited broker may act on behalf of that business entity without being subject to the licensing requirements.
Subd. 19.Real estate broker; broker.
“Real estate broker” or “broker” means any person who:
(b) for another and for commission, fee, or other valuable consideration or with the intention or expectation of receiving the same directly or indirectly negotiates or offers or attempts to negotiate a loan, secured or to be secured by a mortgage or other encumbrance on real estate, which is not a residential mortgage loan as defined by section 58.02, subdivision 18;
Subd. 18.Residential mortgage loan.
“Residential mortgage loan” means a loan secured primarily by either: (1) a mortgage on residential real property; or (2) certificates of stock or other evidence of ownership interest in and proprietary lease from corporations, partnerships, or other forms of business organizations formed for the purpose of cooperative ownership of residential real property.
Regulated by the Secretary of State. Requires Loan Broker Registration. State statute 66-106 through 66-112. Contact Wendy Haynes at:
NC Secretary of State
Information Processing Tech
Money Broker License Required. Allows origination of any type of loan.
Requires Nebraska Loan Broker License
45-190. Terms, defined.(5) Loan broker means any person, except any bank, trust company, savings and loan association or subsidiary of a savings and loan association, building and loan association, credit union, licensed or registered mortgage banker, Federal Housing Administration or United States Department of Veterans Affairs approved lender as long as the loan of money made by the Federal Housing Administration or the United States Department of Veterans Affairs approved lender is secured or covered by guarantees or commitments or agreements to purchase or take over the same by the Federal Housing Administration or the United States Department of Veterans Affairs, credit card company, installment loan licensee, or insurance company which is subject to regulation or supervision under the laws of the United States or this state, who:
(a) For or in expectation of consideration from a borrower, procures, attempts to procure, arranges, or attempts to arrange a loan of money for a borrower;
No Longer requires Nebraska Mortgage Banker License as of 2/2011:
45-702. Terms, defined.(15) Mortgage banker or mortgage banking business means any person (a) other than (i) a person exempt under section 45-703, (ii) an individual who is a loan processor or underwriter, or (iii) an individual who is licensed in this state as a mortgage loan originator and (b) who, for compensation or gain or in the expectation of compensation or gain, directly or indirectly makes, originates, services, negotiates, acquires, sells, arranges for, or offers to make, originate, service, negotiate, acquire, sell, or arrange for a residential mortgage loan;
(16)(a) Mortgage loan originator means an individual who for compensation or gain or in the expectation of compensation or gain (i) takes a residential mortgage loan application or (ii) offers or negotiates terms of a residential mortgage loan.
Licensed under the real estate division.
Licensed under Division of Licensing Services http://www.dos.state.ny.us/licensing/re_broker/re_broker.html
A “real estate broker” means any person, firm, limited liability company or corporation, who,… negotiates or offers or attempts to negotiate, a loan secured or to be secured by a mortgage, other than a residential mortgage loan, as defined in §590 of the Banking Law, or other incumbrance upon or transfer of real estate,… It is the responsibility of licensees to understand the Real Estate License Law, where a more detailed definition of “real estate broker” can be found, including information about different types of brokers: • Individual Broker • Associate Broker • Trade Name Broker • Limited Partnership Broker • Corporate Broker
NAC 645B.015 Activity constituting verifiable business; submission of evidence of activity. (NRS 645B.060, 645B.080)
1. A person conducts verifiable business as a mortgage broker if he is compensated on a commission or percentage basis for:
(a) Handling the arrangements between a borrower and a lender for a loan which is secured by a lien on real property and is consummated as a result of such arrangements;
(b) Originating a loan secured by a lien on real property in the capacity of a lender or provider; or
(c) Purchasing or selling existing notes secured by liens on real property.
SDCL 54-14 defines a mortgage lender as “any person who, for valuable consideration, originates, sells, or services mortgages, or holds himself, herself, or itself out as a person who, for valuable consideration, originates, sells or services mortgages, other than those exempt pursuant to SDCL 54-14-21.”
Not clear which license type. Verifying with the state.
Wisconsin – No Commercial Loan Licensing Required as of April 22, 2008
A Mortgage Banker is a corporation, partnership, limited liability company (LLC) or individual who either originates loans for another person or for itself as payee on the note, sells loans or interests in loans to another person, services loans or land contracts, or provides escrow services.
A Mortgage Broker is a corporation, partnership, limited liability company (LLC) or individual who, on behalf of a loan applicant or an investor (a mortgagee or a land contract vendor), and for commission, money, or other thing of value, finds a loan or negotiates a land contract, loan, or commitment for a loan, or engages in table funding.