Requirements for NMLS State Certification

If your credit startup wants to offer loans in the United States, you almost certainly need to obtain NMLS State Certification. This professional credential is required by some states and is managed through the Nationwide Multistate Licensing System & Registry (NMLS), which tracks licenses, registrations, and compliance information for individuals and companies in the mortgage industry. 

To obtain this certification, you must meet education, experience, and background check requirements set by your state’s licensing agency. In this blog post, we will explore the specific requirements for NMLS State Certification, including pre-licensing and continuing education requirements, work and supervisory experience requirements, and background check requirements.

What is NMLS State Certification?

NMLS State Certification is a professional credential required by some states in the United States for individuals who wish to engage in certain activities related to mortgage loan origination or servicing. The NMLS (Nationwide Multistate Licensing System & Registry) is a centralized system used by state mortgage regulators to manage and track licenses, registrations, and other compliance information for individuals and companies in the mortgage industry. 

To obtain NMLS State Certification, individuals must meet certain education, experience, and other requirements set by their state’s licensing agency, pass a licensing exam, and undergo a background check. The specific requirements may vary by state, but the goal is to ensure that individuals engaged in mortgage-related activities meet certain standards of professionalism and knowledge.

Below, we’ll look at the various requirements for obtaining and maintaining NMLS State Certification. Read on to learn more!

What Are the Requirements for NMLS State Certification?

Founders must meet a number of standards and requirements set by NMLS in order to qualify for and maintain state lending certifications. These requirements break into two categories:

1. Education requirements
2. Experience requirements

Each of these sets of requirements will set different demands on startups. Below, we’ll look closely at what, specifically, is required. 

Education Requirements

For startups that want to apply for NMLS state certifications, there is a number of requirements that must be met before applying and additional requirements that must be maintained for the certifications to remain valid. Startups will have to meet education requirements including:

• Pre-licensing education requirements
• Continuing education requirements
  

The Pre-licensing Education requirements include:

1. Completion of a certain number of pre-licensing education (PE) hours as determined by the state licensing agency.
2. The PE course must be completed through an approved provider.
3. The content of the PE course must cover federal and state laws and regulations related to mortgage lending, as well as general mortgage industry knowledge.
4. Some states require additional coursework or specialized training in certain areas, such as ethics, nontraditional mortgages, or state-specific laws and regulations.
5. The PE course may be completed in person, online, or through self-study.
6. A passing score on a final exam is required to demonstrate comprehension of the course material.
7. The PE course certificate of completion must be submitted with the license application.

The Continuing Education requirements include:

1. Completion of a certain number of CE hours as determined by the state licensing agency.
2. The CE course must be completed through an approved provider.
3. The content of the CE course must cover federal and state laws and regulations related to mortgage lending, as well as updates to general mortgage industry knowledge.
4. Some states require additional coursework or specialized training in certain areas, such as ethics, nontraditional mortgages, or state-specific laws and regulations.
5. The CE course may be completed in person, online, or through self-study.
6. A passing score on a final exam is required to demonstrate comprehension of the course material.
7. The CE course certificate of completion must be submitted with the license renewal application.

Experience Requirements

The second set of requirements startups must meet to acquire and maintain NMLS state certifications are experience-based demands. These requirements include:

• Work experience requirements
• Supervisory experience requirements
• Background check requirements

The Work Experience requirements include:

1. A minimum number of years of experience working in the mortgage industry, as determined by the state licensing agency.
2. The type of experience required may vary by state, but may include loan origination, processing, underwriting, closing, or funding.
3. The experience may be gained through employment with a mortgage company or financial institution, or through self-employment.
4. The experience must be recent, typically within the past three to five years.
5. Documentation of the experience, such as employment verification or tax documents, may be required to be submitted with the license application.

The Supervisory Experience requirements include:

1. A minimum number of years of experience in a supervisory or managerial role within the mortgage industry, as determined by the state licensing agency.
2. The type of supervisory experience required may vary by state, but may include managing loan originators, processors, underwriters, closers, or funders.
3. The supervisory experience may be gained through employment with a mortgage company or financial institution, or through self-employment.
4. The supervisory experience must be recent, typically within the past three to five years.
5. Documentation of the supervisory experience, such as employment verification or tax documents, may be required to be submitted with the license application.

The Background Check requirements include:

1. Criminal history background check: Applicants must disclose their criminal history, if any, and submit to a fingerprint-based criminal background check. The results of the background check will be reviewed by the state licensing agency to determine if the applicant is eligible for NMLS certification.
2. Credit history check: Applicants must disclose their credit history, if any, and may be subject to a credit history check. The state licensing agency may review an applicant’s credit history to determine if the applicant is financially responsible.
3. Other checks: The state licensing agency may also conduct other checks, such as verifying an applicant’s identity or reviewing their professional history.

NMLS certification requirements vary by state, with specific differences in continuing education (CE) hours, work experience requirements, supervisory experience requirements, and background check requirements. The number of required CE hours and the frequency of renewal, as well as the specific work experience requirements, may differ depending on the state. Some states may not require supervisory experience for NMLS certification, while others may have specific supervisory experience requirements. Additionally, the background check requirements may vary by state.

To learn more about the various requirements startups need to meet for NMLS state certifications, the NMLS website offers a robust page on its Resource Center.

Final Thoughts

NMLS state certification is an important credential for startups seeking to engage in mortgage loan origination or servicing. To obtain and maintain the certification, startups must meet certain education and experience requirements set by the state licensing agency. The education requirements include completing pre-licensing education and continuing education, while the experience requirements may include work experience, supervisory experience, and background checks. The specific requirements vary by state, so it’s important to check with the state licensing agency to ensure compliance. The NMLS Resource Center is a valuable resource for startups seeking more information on the requirements for NMLS state certification.

NMLS State Certification FAQ

Below, you will find several frequently asked questions founders have about NMLS State Certifications requirements. 

What are the education requirements for NMLS state certification?

The education requirements may include completing a certain number of pre-licensing education (PE) hours and continuing education (CE) hours, as well as passing a licensing exam.

What are the experience requirements for NMLS state certification?

The experience requirements may include having a certain number of years of work experience in the mortgage industry and/or having supervisory experience.

How do I apply for NMLS state certification?

The application process typically involves creating an NMLS account, submitting an application, paying a fee, completing pre-licensing education, passing a licensing exam, and undergoing a background check.

How often do I need to renew my NMLS state certification?

The renewal frequency may vary by state, but it is typically every one to three years. Renewal may require completing continuing education courses and submitting an application and fee.

Can I apply for NMLS state certification in multiple states?

Yes, you can apply for NMLS state certification in multiple states, but you must meet the specific requirements for each state and pay the applicable fees.

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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