Here’s Your Step-by-step Guide to Getting Licensed as an MLO
Looking to venture into the mortgage industry? Becoming a Mortgage Loan Officer (MLO) is the perfect first step, thanks to the role’s flexible schedule and unlimited earning potential.
To become a Mortgage Loan Officer, you must meet certain professional standards, such as being 18 years of age, completing an up-to-date criminal background check and fingerprinting, and undergoing a full credit check. These actions must be approved by the Nationwide Multistate Licensing System (NMLS) after you’ve created an NMLS account and received your NMLS ID number.
Submit your fingerprints to the FBI and pass a criminal background check (felonies committed in the past seven years or any financial crimes concerning forgery, fraud, bribery, etc., will disqualify you)
Complete all required Pre-Licensure coursework and pass each course’s final exam
Pass the SAFE MLO licensing exam
Apply for your license, submit your credit report, and get a surety bond once you’re hired
Get hired by a sponsoring broker or financial institution
Now let's dive deeper into each of these steps.
NMLS Requirements
The Nationwide Multistate Licensing System (NMLS), was formed after the Global Financial Crisis of 2008 to increase accountability. Since then, federal law mandates that every mortgage professional must register and adhere to NMLS requirements, which include:
Registering to obtain a unique identifier (every mortgage professional must have an assigned number)
Paying fees (both federal and state) that cover initial set up costs including background checks, licensing, credit report, and testing along with fees to maintain the license (for a complete list of fees, visit the NMLS website)
Securing sponsorship, which must be reported when a mortgage professional enters a business relationship with a lender, Mortgage Broker, or lending institution. The Sponsoring Broker will then inform NMLS they’re supervising the mortgage professional’s licensed activities. Some states require an “Approved Sponsor”, so be sure to check your local laws!
Pre-Licensure Education
Pre-Licensure Education (PE) is the first coursework you are required to complete once you’ve set up your NMLS account. Pre-Licensure coursework must be taken with an NMLS-approved provider and consists of a minimum of 20 hours of national education, with at least 8 of these hours covering specific topics and fulfilling set elective hours. While a majority of the Pre-Licensure content is national, many states necessitate an additional 1-5 hours of state-specific education.
In some instances, your PE will expire and you’ll have to retake it. For example, this could happen if you:
Don’t obtain your MLO license within three years of completing PE
Leave the industry and return after an extended period of time
It’s important to note that our national Pre-Licensure education must be completed within 12 days of starting the course — but don’t worry. It’s possible to take your MLO education online, allowing you to earn your license from the comfort of your home when it works with your schedule.
SAFE MLO Test
Once you’ve completed your PE, it’s time to prepare for the SAFE MLO Test. This exam will determine your licensure, as passing it is necessary in order to apply for your MLO license.
Before scheduling your test, you will have to pay the $110 fee and accept the Candidate Agreement. The 190-minute exam consists of 120 multiple choice questions and is available online or in person. To pass, you must achieve a score of 75% or higher, but you do have the ability to retake the test as needed. NMLS has provided a Test Outline and an MLO Testing Handbook to aid in your study efforts. You can also seek out comprehensive Exam Prep to help you feel more confident on test day.
It is important to note that if you do not maintain a valid MLO license for five consecutive years, you will be required to retake the SAFE MLO Test.
Sponsorship
Your Mortgage Loan Officer License will remain in pending status until your employing sponsorship is verified with NMLS. This verification is completed inside of the NMLS portal. You will achieve this by logging into your account and clicking on the “Filing” tab. Once you’ve reached the “Form Filing Home” page, click Company Access. You'll be prompted to add your employer sponsorship by submitting employment details. Once the sponsoring employer receives notice of your verification request, they can approve the sponsorship. Upon approval, you will be officially licensed.
Continuing Education
After you’ve passed the SAFE MLO Test and received your license, you’ll need to take annual Continuing Education (CE) courses to maintain your MLO license. You will not need to complete CE within the same year as your PE and SAFE MLO Test. Every MLO must complete 8 hours of nationally approved Continuing Education annually, as well as any state-specific CE. The 8 required hours of CE must include:
3 hours of Federal Law and Regulations
2 hours of Ethics (including instruction on fraud, consumer protection, and fair lending issues)
2 hours of training related to Lending Standards for the Nontraditional Mortgage Product Market
MLO online education is delivered in one of two ways: via online self-study (OSS) and online instructor-led (OIL) courses. OIL courses are designed and delivered so the instructor leads the course through instructor-to-student or student-to-student interaction, and this style is only used for national Pre-Licensing coursework. OSS-style courses provide videos, text slides, and/or learning-based inquiries to guide students through the coursework, and this style is available for state-specific Pre-Licensing curricula and all Continuing Education courses.
Find Your State's Specific Requirement
Ready to reap the rewards of your own hard work? Get the details on your state's specific requirements for getting your mortgage license:
