State reference
Does your lender need a licence in your state?
A 51-jurisdiction reference: which states licence private lending even for business-purpose loans, which regulator supervises it, and what we have and have not verified.
"Do you need a licence to be a hard money lender?" is one of the most asked and most confidently mis-answered questions in this category. The answer is not one answer. It is three questions, and the wrong one gets asked constantly.
- Which state is the property in? Not where you live, not where the lender is based. The collateral's state governs.
- Is the loan business purpose or consumer purpose? The single biggest fork. Business-purpose loans against investment property are exempt from much consumer mortgage licensing in many states. A loan secured by the borrower's own home generally is not - see owner-occupied hard money.
- Is a broker involved? Brokering is separately licensed in many states even where lending is not, and in a couple of states a licensed broker arranging the loan is itself the exemption.
The states where it is settled
Licence required, all property types
A licence is required to make these loans in this state even when the loan is business purpose and secured by investment property. This is the group where an unlicensed lender is a straightforward problem.
- Arizona — Also expects a physical in-state office and a qualifying employee with mortgage origination experience.
- California — Either a California Financing Law (CFL) licence from DFPI or a DRE real estate broker licence. Applies even to business-purpose loans. CFL licensing has run 10-12 months.
- Nevada — Expects a physical office and an experienced on-site employee, and conducts randomised audits.
- North Dakota — Expects documented internal policies and procedures.
- South Dakota — Expects documented internal policies and procedures.
- Vermont — Expects documented internal policies and procedures.
Licence required for 1-4 unit residential
A licence is required where the collateral is one-to-four-unit residential property, even as an investment. Lending against larger or purely commercial collateral may sit outside it.
- Idaho — Exemption available where a licensed broker arranges the loan.
- Oregon — Applies to residential investment property. Exemption available where a licensed broker arranges the loan.
- Utah — Requires a Principal Lending Manager licence - an individual licence tied to the company - for residential property.
Registration required
No lending licence as such, but the entity must be registered with the state before it does business there.
- North Carolina — No lending licence identified, but registration with the Secretary of State is required.
Depends on borrower and collateral
The answer turns on whether the borrower is an individual or an entity and on how the property is classified. Ask the regulator about your specific structure.
- Florida — Requirements differ depending on whether the borrower is an individual or an entity and how the property is classified.
Why the six matter most
If your property is in California, Arizona, Nevada, North Dakota, South Dakota or Vermont, the business-purpose exemption that private lenders rely on elsewhere does not get them out of licensing. An unlicensed lender operating there is not a grey area - it is a lender doing something the state says requires a licence, which tells you what you need to know about the rest of their compliance.
Every state, with its regulator
| State | Status | Regulator | Notes |
|---|---|---|---|
| Alabama | Not established here - verify | Alabama State Banking Department | — |
| Alaska | Not established here - verify | Alaska Division of Banking and Securities | — |
| Arizona | Licence required, all property types | Arizona Department of Insurance and Financial Institutions | Also expects a physical in-state office and a qualifying employee with mortgage origination experience. source |
| Arkansas | Not established here - verify | Arkansas Securities Department | — |
| California | Licence required, all property types | California Department of Financial Protection and Innovation (DFPI); California Department of Real Estate (DRE) | Either a California Financing Law (CFL) licence from DFPI or a DRE real estate broker licence. Applies even to business-purpose loans. CFL licensing has run 10-12 months. source |
| Colorado | Not established here - verify | Colorado Division of Real Estate (DORA) | — |
| Connecticut | Not established here - verify | Connecticut Department of Banking | — |
| Delaware | Not established here - verify | Delaware Office of the State Bank Commissioner | — |
| District of Columbia | Not established here - verify | DC Department of Insurance, Securities and Banking | — |
| Florida | Depends on borrower and collateral | Florida Office of Financial Regulation | Requirements differ depending on whether the borrower is an individual or an entity and how the property is classified. source |
| Georgia | Not established here - verify | Georgia Department of Banking and Finance | — |
| Hawaii | Not established here - verify | Hawaii Division of Financial Institutions | — |
| Idaho | Licence required for 1-4 unit residential | Idaho Department of Finance | Exemption available where a licensed broker arranges the loan. source |
| Illinois | Not established here - verify | Illinois Department of Financial and Professional Regulation | — |
| Indiana | Not established here - verify | Indiana Department of Financial Institutions | — |
| Iowa | Not established here - verify | Iowa Division of Banking | — |
| Kansas | Not established here - verify | Kansas Office of the State Bank Commissioner | — |
| Kentucky | Not established here - verify | Kentucky Department of Financial Institutions | — |
| Louisiana | Not established here - verify | Louisiana Office of Financial Institutions | — |
| Maine | Not established here - verify | Maine Bureau of Consumer Credit Protection | — |
| Maryland | Not established here - verify | Maryland Office of Financial Regulation | — |
| Massachusetts | Not established here - verify | Massachusetts Division of Banks | — |
| Michigan | Not established here - verify | Michigan Department of Insurance and Financial Services | — |
| Minnesota | Not established here - verify | Minnesota Department of Commerce | Minnesota previously required mortgage loan originator licensing for business-purpose loans and, per Private Lender Link, no longer does. Because that is a recent change, confirm the current position directly rather than relying on either the old rule or this note. source |
| Mississippi | Not established here - verify | Mississippi Department of Banking and Consumer Finance | — |
| Missouri | Not established here - verify | Missouri Division of Finance | — |
| Montana | Not established here - verify | Montana Division of Banking and Financial Institutions | — |
| Nebraska | Not established here - verify | Nebraska Department of Banking and Finance | — |
| Nevada | Licence required, all property types | Nevada Division of Mortgage Lending | Expects a physical office and an experienced on-site employee, and conducts randomised audits. source |
| New Hampshire | Not established here - verify | New Hampshire Banking Department | — |
| New Jersey | Not established here - verify | New Jersey Department of Banking and Insurance | — |
| New Mexico | Not established here - verify | New Mexico Financial Institutions Division | — |
| New York | Not established here - verify | New York State Department of Financial Services (DFS) | Separate from licensing, New York's usury rules are among the tightest in the country - civil usury at 16% and criminal usury at 25% - with exemptions that turn on the borrower being an entity and the loan being business purpose. Get the structure reviewed by a New York attorney. |
| North Carolina | Registration required | North Carolina Commissioner of Banks | No lending licence identified, but registration with the Secretary of State is required. source |
| North Dakota | Licence required, all property types | North Dakota Department of Financial Institutions | Expects documented internal policies and procedures. source |
| Ohio | Not established here - verify | Ohio Division of Financial Institutions | — |
| Oklahoma | Not established here - verify | Oklahoma Department of Consumer Credit | — |
| Oregon | Licence required for 1-4 unit residential | Oregon Division of Financial Regulation | Applies to residential investment property. Exemption available where a licensed broker arranges the loan. source |
| Pennsylvania | Not established here - verify | Pennsylvania Department of Banking and Securities | — |
| Rhode Island | Not established here - verify | Rhode Island Division of Banking | — |
| South Carolina | Not established here - verify | South Carolina Board of Financial Institutions | — |
| South Dakota | Licence required, all property types | South Dakota Division of Banking | Expects documented internal policies and procedures. source |
| Tennessee | Not established here - verify | Tennessee Department of Financial Institutions | — |
| Texas | Not established here - verify | Texas Office of Consumer Credit Commissioner (OCCC); Texas Department of Savings and Mortgage Lending | Lending against commercial and investment property is treated as business lending and is generally not licensed. Lending for consumer purposes, including against a primary residence, is licensed under Texas Finance Code ch. 342. The trigger is the purpose of the loan, not the status of the lender. source |
| Utah | Licence required for 1-4 unit residential | Utah Division of Real Estate | Requires a Principal Lending Manager licence - an individual licence tied to the company - for residential property. source |
| Vermont | Licence required, all property types | Vermont Department of Financial Regulation | Expects documented internal policies and procedures. source |
| Virginia | Not established here - verify | Virginia Bureau of Financial Institutions (State Corporation Commission) | — |
| Washington | Not established here - verify | Washington State Department of Financial Institutions | — |
| West Virginia | Not established here - verify | West Virginia Division of Financial Institutions | — |
| Wisconsin | Not established here - verify | Wisconsin Department of Financial Institutions | — |
| Wyoming | Not established here - verify | Wyoming Division of Banking | — |
Usury is a separate question, and it bites
Licensing and interest-rate limits are different regimes and a lender can be clean on one and not the other. Some states exempt business-purpose loans from usury caps entirely; others apply them regardless of purpose or collateral.
New York is the example worth knowing because the numbers are low and the penalties are not: civil usury at 16% and criminal usury at 25%, with exemptions that turn on the borrower being an entity and the loan being genuinely business purpose. If your rate plus points plus fees annualises above those numbers - and on a short loan it easily can, as the true-cost calculator will show you - that is a question for a New York attorney before you sign, not after.
What to actually do with this
- Find your state in the table and note the regulator.
- Search the lender's exact entity name on NMLS Consumer Access. Absence is not automatically damning in an exempt state; a mismatch with what they told you always is.
- Call or email the regulator and ask the narrow question: does making a business-purpose loan secured by non-owner-occupied residential property in this state require a licence? They answer this for free.
- Confirm the entity is registered and in good standing with the Secretary of State.
- Search the county recorder's grantee index for their name - see verify a lender.
Sources
- Private Lender Link, States That Require a License for Private Lending (Dec 2024)
- Silberman Law Firm, Thinking About Hard Money Lending in Texas: Do You Need a License?
- Fortra Law, Hard Money Lending Laws: A Quick Guide
- NMLS Consumer Access (licensee lookup)
- Conference of State Bank Supervisors, state regulator directory
Questions people actually ask
Do you need a license to be a hard money lender?
It depends entirely on the state and on the purpose of the loan, and this is one of the most commonly misstated facts in the whole vertical. Broadly: business-purpose loans secured by investment property are exempt from most consumer mortgage licensing in many states, while several states license this activity regardless of purpose, and a loan secured by a borrower's own home is a different regulatory animal almost everywhere.
We are not going to publish a fifty-state answer we have not verified state by state - that research is underway and will be published with citations. In the meantime, the reliable move is to check the specific entity on NMLS Consumer Access and ask the state regulator directly. Here is how.
What are the requirements for a hard money lender?
As a matter of law, whatever the state where the property sits requires - which varies from nothing beyond ordinary business registration to full mortgage lender licensing with bonding and examination. As a matter of practice, a legitimate lender will have a registered entity, a real address, named principals, a track record you can verify, and no objection to you checking any of it.
Which states require a license for commercial lending?
Commercial and business-purpose lending licensing is genuinely inconsistent across states, and the answer also turns on whether the loan is secured by a dwelling, who the borrower is, and whether a broker is involved. Rather than guess, verify the entity on NMLS and contact the state regulator - our state regulators guide shows the process.