A career as a mortgage loan originator (MLO), often called a loan officer, involves guiding homebuyers through the financial process of securing a loan. These professionals help individuals and families purchase homes. Becoming a licensed loan officer in Kentucky requires completing a specific sequence of steps mandated by both federal and state authorities.
Meet Kentucky’s Basic Loan Officer Requirements
Before embarking on the formal licensing process, prospective loan officers in Kentucky must meet several foundational prerequisites. An individual must be at least 18 years of age to be eligible for a mortgage loan originator license in Kentucky. Additionally, candidates must possess a high school diploma or a General Educational Development (GED) certificate.
Complete Pre-Licensing Education
The next stage involves completing a mandatory 20-hour pre-licensing education program. This coursework is a federal requirement under the SAFE Act and must be obtained from a provider approved by the Nationwide Multistate Licensing System & Registry (NMLS). The 20-hour curriculum is broken down into specific subject areas:
- Three hours on federal laws and regulations.
- Three hours on ethics, which covers fraudulent practices and consumer protection.
- Two hours on non-traditional mortgage products.
- Twelve hours of elective courses.
It is important to note that while some states mandate additional state-specific education, Kentucky does not. Therefore, only the core 20 hours of NMLS-approved education are necessary.
Pass the SAFE MLO Test
After completing the required education, applicants must pass a comprehensive examination. The SAFE Mortgage Loan Originator Test is a standardized exam required for all prospective MLOs. Kentucky utilizes the National Test Component with Uniform State Content (UST), which means a separate state-specific test is not required.
The test consists of 115 scored multiple-choice questions, and candidates are given 3 hours and 10 minutes to complete it. A passing score of 75% or higher is required. The exam covers topics such as federal mortgage-related laws, general mortgage knowledge, MLO activities, and ethics.
Scheduling for the test is done through the NMLS portal, and the fee to take the exam is $110. For those who do not pass on their first attempt, there is a 30-day waiting period before they can retake it.
Apply for Your Kentucky MLO License
With the education and testing requirements fulfilled, the next step is to formally apply for the license through the NMLS. First, create a personal account on the NMLS website, which will generate a unique identifying number. Applicants must then complete and submit the MU4 Form, the individual application for a mortgage loan originator license.
As part of this process, candidates must authorize the NMLS to pull a credit report. They also need to submit fingerprints for a federal criminal background check conducted by the FBI. The fingerprinting appointment can be scheduled through the NMLS portal with their designated vendor, Fieldprint, at a cost of $36.25.
Several non-refundable fees are associated with the application, including an NMLS processing fee, a Kentucky application fee, and separate fees for the background check and credit report. State regulators will review the application and all supporting documentation before making a licensing decision.
Secure Employment and Sponsorship
Upon approval of the application by the Kentucky Department of Financial Institutions, the NMLS will set the license status to “approved-inactive.” To legally begin originating mortgages, the newly licensed MLO must be hired by a state-licensed mortgage company, such as a broker or lender.
This hiring company must then formally sponsor the MLO’s license through the NMLS system. Sponsorship is the electronic link between the individual MLO and their employing company, confirming to regulators that the MLO is supervised by a licensed entity. Once the employer sponsorship is in place, the license status changes to “active,” and the individual is authorized to conduct mortgage business.
Fulfill Continuing Education Requirements
Obtaining a mortgage loan originator license must be maintained annually. To keep their license in good standing, Kentucky MLOs are required to complete continuing education (CE) each year. The annual requirement consists of eight hours of NMLS-approved education.
The coursework includes:
- Three hours of federal law.
- Two hours of ethics.
- Two hours of non-traditional mortgage lending.
- One hour of Kentucky state-specific education.
A “successive years” rule prevents MLOs from taking the same CE course two years in a row.