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Public Protection Cabinet

Mortgage Licensing and Exemptions

All mortgage entities and mortgage loan originators must use the Nationwide Multistate Licensing System & Registry (NMLS) for licensing and registration. Exempt companies do not have to use NMLS; however, the individuals working for exempt companies must use NMLS. Operational assistance is available through a national call center at 855-NMLS-123 (855-665-7123). The Kentucky Department of Financial Institutions (DFI) has been a part of the NMLS since its launch in 2008.
 
Notice
 
Master servicers and sub servicers, with loans secured by residential real property located in Kentucky, who don't currently have a license will have until March 1, 2017, to obtain one. For additional details, read the DFI Memorandum of Dec. 22, 2016 and the Mortgage Servicer Licensing FAQs.
 
Notice
 
During the 2016 legislative session, Gov. Matthew Bevin signed into law Senate Bill 97, which eliminates the requirement for employee loan processors to register with DFI.  However, non-W2 (contract) loan processors will need to continue the previously established registration process. This new law became effective in July 2016.
 
Education requirements have also changed. Pre-licensing education will no longer be required for employee mortgage loan processors. Continuing education is still a requirement for processors, but it has been reduced to eight hours annually. The processor's eight hours of continuing education will not be reported through NMLS; instead the employing company must maintain proof that their processors have received the eight hours.
 
The continuing education requirement also has been reduced to eight hours annually for loan originators, but will still be reported through NMLS.
 

For employee loan processors, the supervising mortgage company or broker is responsible for:
1) Ensuring the continuing education requirements are satisfied, and
2) Performing a background check and credit check prior to hiring an employee that will be a mortgage loan processor.

 
A new administrative regulation, 808 KAR 12:055, became effective Nov. 4, 2016, and establishes uniform standards for mortgage loan processor employee background and credit checks.
 
Mortgage Broker and Company Licenses 
 
Mortgage bankers, servicers and brokers are licensed to make, purchase, buy, sell, service and broker Kentucky residential mortgages. If an out-of-state branch is doing Kentucky business, it must be licensed with DFI.
 
How to License a New Mortgage Broker/Company: 
  1. Read Kentucky Revised Statutes (KRS) 286.8.
  2. Submit the application form online via NMLS.
  3. Submit a surety bond.
The full licensing fee is $750 for the principal office and $400 for each branch office. Also there is an NMLS processing fee of $100 per principal office and $20 per branch.
 
How to Renew a Mortgage Broker/Company License: 
  1. Read KRS 286.8.
  2. Submit renewal online via NMLS.
  3. Submit the Annual Mortgage Activity Report.
The license renewal period is on a calendar-year basis. All entities must renew by Nov. 30 each year. The renewal fee is $350 for the principal office and $250 for each branch office. Also there is an NMLS processing fee of $100 per principal office and $20 per branch. If licenses are not renewed before the expiration, there will be a 30-day reinstatement period, for which a $250 fee will be charged.
 
For more information email Pam Fitzgerald or call 502-782-9042 with questions regarding mortgage broker and company licenses, as well as companies filing a claim of exemption.
 
Companies Filing a Claim of Exemption (HUD and Nonprofit)
 
Mortgage bankers, servicers and brokers approved by HUD shall register their exemption. Exemptions will expire annually on Dec. 31 and must be renewed prior to that date. For more information, read KRS 286.8
 
HUD-exempt entities (mortgage lenders, brokers and branches) must report annually the number of FHA-insured mortgage loans that were originated on Kentucky properties during the preceding calendar year. For more information, read DFI's HUD-Exempt Entities Compliance Procedures for Changes to KRS 286.8 on the Orders of the Commissioner Web page.
 
NOTE: Entities that have previously surrendered a HUD exemption or have had a HUD exemption revoked for failure to meet the 12 FHA-insured loan requirement set forth in KRS 286.8-020(4) are not eligible to reapply for another HUD exemption unless certain conditions are met. An entity must become licensed and fund or broker a minimum of 12 FHA-insured loans originated on Kentucky properties in a single calendar year in order to reacquire a HUD exemption once it is surrendered or revoked. In addition to brokering 12 FHA-insured loans, the entity also must have been approved by HUD for five years or have held a license for five consecutive years.
 
Mortgage Processors
 
Pursuant to Senate Bill 97 (2016 Kentucky Acts Ch. 129), which became law in July 2016, mortgage loan processors are no longer required to be registered with DFI. However, certain due diligence must be conducted by the employing entity prior to hiring a mortgage loan processor, pursuant to KRS 286.8-255(9) and 808 KAR 12:055​.
 
Mortgage Originator Registrations
 
All loan originators (loan officers) of licensed entities and HUD-approved mortgage companies and/or mortgage brokers are required to be registered. Out-of-state loan officers and brokers assisting Kentucky clients must be registered with DFI. 
 
NOTE: Individuals working for nonprofit entities may be exempt from registration. For more information, read the orders of the commissioner dated Jan. 5, 2012, and Aug. 1, 2011.
 
How to Register a New Loan Officer/Originator:
  1. Read KRS 286.8.
  2. Submit an electronic background check through NMLS.
  3. Complete 20 hours of pre-licensing education.
  4. Pass the national test component with uniform state content.
  5. Submit the application form online via NMLS.  
  6. Consent to a credit report through NMLS. For more details, read 808 KAR 12:021. Applicants who have a credit score of 600 or better meet the financial responsibility requirement.
  7. All mortgage loan originators must be covered by a surety bond, either through their employer or independently, for their entire registration period. The bond cannot be terminated without 30 days prior written notice to DFI. Mortgage loan originators with an annual loan volume of less than $10 million must have a $15,000 surety bond. Those with an annual loan volume of greater than $10 million must have a $20,000 surety bond. For more information, read the order of the commissioner dated Dec. 18, 2009.

The registration fee is $50. Also there is an NMLS processing fee of $30. You will receive an email from NMLS upon approval of your registration. Registration status is available online.

 How to Renew a Loan Officer/Originator Registration:
  1. Read KRS 286.8.
  2. Complete 8 hours of continuing education during the calendar year. One of those 8 hours must be Kentucky-specific. 
  3. Submit renewal online via NMLS
  4. Submit the Annual Mortgage Activity Report if using an individual bond rather than an entity bond.
  5. Originators also must submit a background check to NMLS and consent to a credit report through NMLS, pursuant to Senate Bill 97 (2016 Kentucky Acts Ch. 129).
The registration renewal period is on a calendar-year basis. All individuals must renew by Nov. 30 each year. The renewal fee is $50. Also there is an NMLS processing fee of $30. If registrations are not renewed before the expiration, there will be a 30-day reinstatement period, for which a $250 fee will be charged. You will receive an email from NMLS upon approval of your registration. The status of renewals is available online
 
For more information, email Emily Clifford or call 502-782-9037 or 844-354-0612 or email Jackie Little or call 502-782-9041 with questions regarding mortgage individual registrations.  
 
Examination
 
The examination process for mortgage loan brokers and companies licensed in Kentucky has been enhanced. A document [PDF 89KB] to highlight these changes was sent via email to the NMLS contact provided for all licensed entities on April 1, 2011. For more information, email mortgage examination branch manager Gary Davis or call 502-429-3290, ext. 2205.
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 Mortgage Documents

 
  
  
  
  
HUD Exempt - FHA Loans Report.pdfHUD Exempt - FHA Loans ReportExempt48 KB
Mortgage Loan Broker Loan File Checklist.pdfMortgage Loan Broker Loan File ChecklistBroker - NOTE: Checklist is provided for informational/examination purposes and is not an exhaustive list226 KB
Mortgage Loan Company Loan File Checklist.pdfMortgage Loan Company Loan File ChecklistCompany - NOTE: Checklist is provided for informational/examination purposes and is not an exhaustive list226 KB
Notification of Cessation of Business, Location of Physical Records and Records Custodian Disclosure.pdfNotification of Cessation of Business, Location of Physical Records and Records Custodian DisclosureBroker/Company31 KB
Privacy Act Waiver.pdfPrivacy Act WaiverIndividual/Processor - NOTE: Only submit this form if DFI notifies you it is required after reviewing your information.54 KB
Mortgage Company and Mortgage Broker Record Retention Schedule.pdfMortgage Company and Mortgage Broker Record Retention ScheduleBroker/Company47 KB
ML-7 Branch Authorization Form.pdfML-7 Branch Authorization FormBroker/Company11 KB
ML-6 Disclosure of Location at a Residence Form.pdfML-6 Disclosure of Location at a Residence FormBroker/Company11 KB
ML-10  HUD Exemption Application.pdfML-10 HUD Exemption ApplicationExempt89 KB
ML-9 Non-Profit Exemption Application.pdfML-9 Non-Profit Exemption ApplicationExempt20 KB
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