NMLS Certification: Pre-Licensing Education and State Licensing Exams

Starting a lending startup requires founders to obtain an NMLS state license certification, which involves completing pre-licensing education and passing the NMLS licensing exam. 

As discussed in our post on NMLS applications, the large process of getting an NMLS state license certification can be looked at as five mini-process: 

1. Choosing state certification(s) to pursue
2. Applying for NMLS State certification
3. Completing the Pre-Licensing education
4. Taking the NMLS State Licensing Exam
5. Completing the background check

These five mini-processes can be grouped into application, education, and background check categories. In this post, we’ll look at the steps involved with the first category – NMLS education.

Completing Pre-Licensing Education

To complete NMLS pre-licensing education, founders of a lending startup will need to follow these general steps:

1. Research Education Providers
2. Choose a Course
3. Complete the Course
4. Pass the Exam
5. Obtain a Certificate of Completion

We’ll look at each of these steps in more detail below. 

Research Education Providers

The first step is to research NMLS-approved education providers in the state(s) you are seeking certification in. The NMLS website has a list of approved education providers for each state.

Choose a Course

Once you have identified NMLS-approved education providers, you will need to choose a pre-licensing education course. Each state has its own specific education requirements, so it’s important to choose a course that meets the requirements for the state(s) you are seeking certification in.

You can find a complete list of the NMLS approved course providers here. 

Complete the Course

After choosing a course, you will need to complete the required hours of pre-licensing education. The number of hours required varies depending on the state(s) you are seeking certification in. The pre-licensing education courses can be completed online or in-person, depending on the provider.

Pass the Course Exam

After completing the pre-licensing education course, you will need to pass the course exam with a score of at least 75%. The exam will cover the material covered in the course and may be taken online or in-person, depending on the provider.

Obtain a Certificate of Completion

After passing the course exam, you will need to obtain a certificate of completion from the education provider. This certificate will be required as proof of completion when applying for NMLS state certification.

It’s important to note that the exact steps to complete NMLS pre-licensing education may vary slightly depending on the state(s) you are seeking certification in. You should carefully review the specific education requirements for each state before beginning the pre-licensing education process.

Taking the NMLS State Licensing Exam(s)

Once founders have completed the NMLS pre-licensing education, they can take the NMLS licensing exam. Here’s are the key steps:

1. Scedulule the Exam
2. Understand the Test Format
3. Know the Test Content 
4. Prepare for the Exam
5. Get a Passing Score

Read on to learn more about each of these steps.

Schedule the Exam

The first step is to schedule the exam through the NMLS website. The exam can be taken at a testing center or online, depending on the state(s) you are seeking certification in.

Exam Format

The NMLS licensing exam is a computer-based test with a mix of multiple-choice and true/false questions. The number of questions and time limit varies by state, but generally, the exam consists of 125 questions and has a time limit of 3 hours and 30 minutes.

Exam Content

The exam covers federal mortgage regulations and general mortgage knowledge. The content of the exam is based on the NMLS National Test Content Outline, which is available on the NMLS website. The exam will cover topics such as mortgage loan origination activities, ethical practices, federal regulations, and non-traditional mortgage products.

Exam Preparation

Founders should prepare for the NMLS licensing exam by studying the pre-licensing education materials and reviewing the NMLS National Test Content Outline. Many education providers offer exam preparation materials, such as practice exams and study guides, to help founders prepare for the exam. It’s also a good idea to take advantage of any exam prep courses offered by the education provider or other industry professionals.

Pass Score

Founders will need to score at least 75% on the NMLS licensing exam to pass. If they do not pass, they will need to wait a certain amount of time before retaking the exam.

It’s important to note that the exact format and content of the NMLS licensing exam may vary slightly depending on the state(s) you are seeking certification in. Founders should carefully review the specific exam requirements for each state before scheduling and preparing for the exam.

Final Thoughts

Getting an NMLS state license certification is a necessary step for founders of lending startups to gain access to resources and establish credibility. Completing pre-licensing education and passing the NMLS licensing exam are crucial components of the certification process. By carefully researching NMLS-approved education providers, choosing a course that meets state requirements, completing the course, passing the course exam, and obtaining a certificate of completion, founders can fulfill the pre-licensing education requirements. Preparing for the NMLS licensing exam by studying pre-licensing education materials, reviewing the NMLS National Test Content Outline, and taking advantage of exam preparation materials and courses can help founders pass the exam and obtain the necessary score. It’s important to note that the exact steps and requirements for completing pre-licensing education and taking the NMLS licensing exam may vary depending on the state(s) of certification, so careful research and preparation are essential. With the right preparation, founders can successfully navigate the certification process and establish a strong footing for their lending startup.

NMLS State Certification Pre-Licensing Education and Exam FAQ

Here are four frequently asked questions (FAQ) related to NMLS state certification pre-licensing education and exam and their answers:

What is pre-licensing education, and how long does it take?

Pre-licensing education is a requirement for obtaining NMLS state certification. The length of the pre-licensing education requirement varies by state and the specific education provider, but it generally consists of several hours of coursework that covers topics such as mortgage loan origination activities, ethical practices, federal regulations, and non-traditional mortgage products. The coursework can be completed online or in-person, depending on the education provider.

What is the NMLS National Exam, and how do I prepare for it?

The NMLS National Exam is a computer-based test that covers federal mortgage regulations and general mortgage knowledge. The content of the exam is based on the NMLS National Test Content Outline. To prepare for the exam, it’s recommended to study the pre-licensing education materials, review the NMLS National Test Content Outline, and take advantage of any exam preparation materials, such as practice exams and study guides, provided by the education provider or other industry professionals.

How long is the NMLS National Exam, and what is the passing score?

The NMLS National Exam is generally 125 questions and has a time limit of 3 hours and 30 minutes, but the length and time limit may vary by state. To pass the exam, a score of at least 75% is required. The exact passing score may vary by state.

Can I retake the NMLS National Exam if I fail it, and what is the waiting period?

Yes, you can retake the NMLS National Exam if you fail it. However, the waiting period between exam attempts varies by state. Some states require a waiting period of 30 days, while others require a waiting period of 90 days. It’s important to check the specific waiting period requirement for the state(s) you are seeking certification in.

Frank Gogol

A seasoned SEO expert, Frank has a long history of working with and for startups. Starting in mid-2018, Frank served as the SEO Strategist for Stilt, a fintech startup that provided fair loans for immigrants in the US and other underserved markets. While with the company, he scaled site traffic from zero to more than 1.5 million unique visits per month, driving the bulk of the company’s lead generation until it was acquired by J.G. Wentworth in December 2022. As employee #5 at Stilt, Frank was witness to, and part of, the successful building and sale of a fintech company, uniquely positioning him to create content for founders about all things startups.

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