We found no Kentucky rule against a real-estate agent acting as the mortgage loan originator on the same purchase. The real-estate license law treats the buyer’s knowledge of the dual interest as the cure, and the mortgage licensing law contains no prohibition.
What Kentucky requires
- Make sure the buyer knows of the mortgage role and its compensation before acting, as KRS 324.160(4)(e) contemplates.
- Hold an active Kentucky MLO license sponsored by a licensed mortgage company.
What the rule says
Acting for more than one (1) party in a transaction without the knowledge of all parties for whom the licensee acts
Except as provided in paragraph (b) of this subsection, it shall be unlawful for any licensee or person holding a claim of exemption to originate a loan secured by a mortgage on residential real property in Kentucky if the total net income generated by the licensee or person exceeds the greater of the following:
Paragraph (a) of this subsection shall not apply to a loan for which the total points and fees on the loan do not exceed the threshold set forth in 12 C.F.R. sec. 1026.43(e)(3), as amended.
What we have not settled
KRS 286.8-125 caps fees between affiliated real-estate and mortgage businesses. Keep the real-estate brokerage unaffiliated with the mortgage company, or fit the carve-out.
What applies in every state
- Both licenses must be active. The mortgage side is an individual MLO license, sponsored by a licensed mortgage company, with the SAFE test, 20 hours of education and a background check behind it.
- Federal law sits above the state rule. RESPA Section 8 bars pay for a referral, and Regulation Z sets what a loan originator may be paid for. Compensation on the mortgage side is for origination work performed. The RESPA and referral-fee explainer walks through it.
- The lender on the loan has its own rule. FHA permits the dual role since 2022. Conventional lenders decide file by file in writing.
- The buyer keeps the right to choose any lender, and the disclosure says so.