What States Require a License for Commercial Loan Origination?
Brokering commercial real estate loans can be a lucrative business. While some states do not require a license to be a commercial loan originator or open a firm, others require licensing in similar fields. Among states that require licensing, some allow originators to use standard real estate or mortgage broker licenses to do business financial commercial properties.
According to the National Association of Mortgage Brokers, commercial properties are buildings not designated as single, residential dwellings. Specifically, properties are considered commercial if they are condominium complexes; buildings containing more than five residential units; mixed use buildings; warehouses; industrial buildings; office buildings; retail properties; storage buildings; hotels and motels; restaurants; special purposed properties such as:
- churches
- gas stations
- golf courses
- hospitals
- parks
- funeral homes
In eight states, those wishing to originate commercial mortgage loans must adhere to rules which govern mortgage loan originators and brokers. This means individuals must obtain individual licenses, and their employers must hold state mortgage broker permits. These states are: Arizona, Arkansas, Florida, Maryland, Nevada, North Dakota, South Dakota and Wisconsin (as of June 2011).
As of June 2011, three states do not require mortgage brokerage licensing to originate commercial real estate loans. However, originators of such financial transactions in California, New Jersey and New York must be licensed real estate agents, and work for firms owned by individuals who hold valid real estate broker licenses.
Originators required to hold mortgage broker or real estate licenses must adhere to continuing education rules as governed by their state to keep their licenses active. However, in some states, even those that do not require licensing to originate commercial loans, loan officers are permitted to count commercial loans they originate as continuing education courses. Those states include: California Illinois, Iowa, Kansas, Nevada, Oklahoma, Oregon, North Dakota, South Dakota and Wisconsin.