How to Become a Mortgage Loan Originator in California
By Yvette Hitchens, CDEI, GSI, licensed California real estate broker and founder of The MH Trainer
Mortgage loan originators (MLOs) help buyers finance their homes, and every MLO in the country is licensed through the Nationwide Multistate Licensing System (NMLS). California adds one twist: there are two ways to get licensed, depending on who you'll work for. Here's how to choose your path and get started.
Step 1: Choose your path: DFPI license or DRE endorsement
| Path | Who it's for | Regulator |
|---|---|---|
| DFPI MLO license | MLOs working for a mortgage lender or broker licensed by the DFPI under the California Financing Law or the California Residential Mortgage Lending Act | Department of Financial Protection and Innovation (DFPI) |
| DRE MLO endorsement | California real estate licensees who originate loans through a real estate broker | Department of Real Estate (DRE) |
If you already hold a California real estate license, the DRE endorsement adds mortgage work to the license you have. If you'll work for a mortgage company, the DFPI license is usually the path. Your future employer can tell you which one it needs.
Step 2: Complete 20 hours of NMLS-approved education
Federal law requires 20 hours of prelicensing education from an NMLS-approved provider. For California's DFPI license, those 20 hours include:
- 3 hours of federal law and regulations
- 3 hours of ethics
- 2 hours of nontraditional mortgage products
- 2 hours of California law
- 10 hours of electives
You can complete it all online at your own pace.
View mortgage licensing coursesStep 3: Pass the SAFE MLO test
The SAFE MLO test is the national licensing exam, and you need a 75% to pass. California also requires its state test component, or the national test with uniform state content. If you don't pass, you can retake the test twice, waiting at least 30 days between attempts. After three failed attempts, you must wait 180 days.
Step 4: Background check, credit report, and sponsorship
Through NMLS, you'll submit fingerprints for an FBI background check and authorize a credit report. For a DFPI license, your application must be sponsored by a DFPI-licensed lender or broker, so most new MLOs line up an employer before they apply.
Step 5: Keep your license active
California MLO licenses renew every year between November 1 and December 31. You'll need 8 hours of NMLS-approved continuing education each year, including one hour of California content.
Financing manufactured homes: an underserved specialty
Manufactured home buyers often struggle to find a loan officer who understands their options. Homes on land can qualify for traditional mortgages, while homes in mobilehome parks are usually financed with personal property (chattel) loans that follow different rules. MLOs who understand manufactured housing can help buyers that many lenders turn away.
Explore manufactured housing trainingFrequently asked questions
How many hours of education do I need for a California mortgage license?
20 hours of NMLS-approved prelicensing education. For the DFPI license, that includes 2 hours of California law.
Do I need a real estate license to become a mortgage loan originator?
No. You can get a DFPI MLO license without a real estate license. If you already have a California real estate license, the DRE endorsement is another option.
Can I take MLO prelicensing courses online?
Yes. The required courses are available online through The CE Shop, so you can study on your own schedule.
Can a mortgage loan originator finance manufactured homes?
Yes. Homes on land can be financed with traditional mortgages, and homes in parks are usually financed with chattel loans. Lenders and programs vary, so knowing the options gives you an edge.
Ready to start your mortgage career?
Begin your NMLS prelicensing courses online today.
Start your mortgage coursesAffiliate has an agreement with The CE Shop to promote online course information to consumers and real estate licensees. Affiliate is not the developer of these courses and is simply providing a referral. All education is provided by The CE Shop and any questions regarding course content or course technology should be directed to The CE Shop.
Licensing requirements change. Always confirm current requirements with NMLS, the DFPI, or the DRE before you enroll or apply.