Latest Updates as to Commercial Mortgage Broker Licensing Requirements

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Latest Updates as to Commercial Mortgage Broker Licensing Requirements

Don KonipolBusiness Member
Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes

Commercial, non owner occupied residential and business purpose real estate mortgage loans are handled under state authority and jurisdiction.

Here’s the latest information 

37 states do NOT require licensure of any kind for brokering  commercial mortgage or residential investment mortgage loans 

5 states (Virginia, Utah, Oregon, Minnesota, and Idaho require licensure for brokering residential investment mortgage loans but not for brokering commercial mortgage loans.  Utah, Oregon and Idaho require a mortgage broker license; Virginia and Minnesota require a real estate broker license.

8 states (Arizona, California, Illinois, Michigan, North Dakota, New Jersey, Nevada and South Dakota require licensure for brokering both commercial mortgage and residential investment mortgage loans. Arizona, Nevada and South Dakota require a mortgage broker license. California, Michigan and New Jersey require a real estate broker license. Illinois require a loan broker license and North Dakota requires a money broker license.

Hope this helps 

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Chris SeveneyBusiness Member
Moderator
Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
2mo

Thanks for the update.

The other key thing i will add for lenders is to understand which states do and do not allow prepayment penalties 

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  • Tim SwierczekPro Member
    Lender · White Bear Township, MN · Member since 2016 · 1k+ posts · 1k+ votes
    2mo
    Quote from @Don Konipol:

    Commercial, non owner occupied residential and business purpose real estate mortgage loans are handled under state authority and jurisdiction.

    Here’s the latest information 

    37 states do NOT require licensure of any kind for brokering  commercial mortgage or residential investment mortgage loans 

    5 states (Virginia, Utah, Oregon, Minnesota, and Idaho require licensure for brokering residential investment mortgage loans but not for brokering commercial mortgage loans.  Utah, Oregon and Idaho require a mortgage broker license; Virginia and Minnesota require a real estate broker license.

    8 states (Arizona, California, Illinois, Michigan, North Dakota, New Jersey, Nevada and South Dakota require licensure for brokering both commercial mortgage and residential investment mortgage loans. Arizona, Nevada and South Dakota require a mortgage broker license. California, Michigan and New Jersey require a real estate broker license. Illinois require a loan broker license and North Dakota requires a money broker license.

    Hope this helps 


     Technically, this is incorrect. Minnesota requires a Real Estate Broker or a Limited Broker's License to broker a commercial loan.  It's silly, but true. A Real Estate Broker knows nothing about commercial finance, but Legislators are not a brilliant group of people.

    1Reply
    • Don KonipolBusiness Member
      OP
      Investor · The Woodlands TX / Avon, CT · Member since 2009 · 6k+ posts · 10k+ votes
      2mo
      Quote from @Tim Swierczek:
      Quote from @Don Konipol:

      Commercial, non owner occupied residential and business purpose real estate mortgage loans are handled under state authority and jurisdiction.

      Here’s the latest information 

      37 states do NOT require licensure of any kind for brokering  commercial mortgage or residential investment mortgage loans 

      5 states (Virginia, Utah, Oregon, Minnesota, and Idaho require licensure for brokering residential investment mortgage loans but not for brokering commercial mortgage loans.  Utah, Oregon and Idaho require a mortgage broker license; Virginia and Minnesota require a real estate broker license.

      8 states (Arizona, California, Illinois, Michigan, North Dakota, New Jersey, Nevada and South Dakota require licensure for brokering both commercial mortgage and residential investment mortgage loans. Arizona, Nevada and South Dakota require a mortgage broker license. California, Michigan and New Jersey require a real estate broker license. Illinois require a loan broker license and North Dakota requires a money broker license.

      Hope this helps 


       Technically, this is incorrect. Minnesota requires a Real Estate Broker or a Limited Broker's License to broker a commercial loan.  It's silly, but true. A Real Estate Broker knows nothing about commercial finance, but Legislators are not a brilliant group of people.

      Thanks Tim.  It would be good if anyone with local information provided corrected information to my post, as I of course copied it from a reliable source but the source acknowledged that the list may not be 100% accurate. 
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  • Jay HinrichsBusiness Member
    Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
    2mo
    Quote from @Don Konipol:

    Commercial, non owner occupied residential and business purpose real estate mortgage loans are handled under state authority and jurisdiction.

    Here’s the latest information 

    37 states do NOT require licensure of any kind for brokering  commercial mortgage or residential investment mortgage loans 

    5 states (Virginia, Utah, Oregon, Minnesota, and Idaho require licensure for brokering residential investment mortgage loans but not for brokering commercial mortgage loans.  Utah, Oregon and Idaho require a mortgage broker license; Virginia and Minnesota require a real estate broker license.

    8 states (Arizona, California, Illinois, Michigan, North Dakota, New Jersey, Nevada and South Dakota require licensure for brokering both commercial mortgage and residential investment mortgage loans. Arizona, Nevada and South Dakota require a mortgage broker license. California, Michigan and New Jersey require a real estate broker license. Illinois require a loan broker license and North Dakota requires a money broker license.

    Hope this helps 


    don Check Vermont I believe you need to be licensed there as well to do a commerical loan
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  • Chris SeveneyBusiness Member
    Moderator
    Investor · VA · Member since 2015 · 21k+ posts · 19k+ votes
    2mo

    Thanks for the update.

    The other key thing i will add for lenders is to understand which states do and do not allow prepayment penalties 

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  • Erik EstradaBusiness Member
    Lender · Member since 2022 · 6k+ posts · 1k+ votes
    2mo
    Quote from @Don Konipol:

    Commercial, non owner occupied residential and business purpose real estate mortgage loans are handled under state authority and jurisdiction.

    Here’s the latest information 

    37 states do NOT require licensure of any kind for brokering  commercial mortgage or residential investment mortgage loans 

    5 states (Virginia, Utah, Oregon, Minnesota, and Idaho require licensure for brokering residential investment mortgage loans but not for brokering commercial mortgage loans.  Utah, Oregon and Idaho require a mortgage broker license; Virginia and Minnesota require a real estate broker license.

    8 states (Arizona, California, Illinois, Michigan, North Dakota, New Jersey, Nevada and South Dakota require licensure for brokering both commercial mortgage and residential investment mortgage loans. Arizona, Nevada and South Dakota require a mortgage broker license. California, Michigan and New Jersey require a real estate broker license. Illinois require a loan broker license and North Dakota requires a money broker license.

    Hope this helps 


     This helps a lot. Thank you! 

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