Yes, with conditions written into the rules. South Dakota’s real-estate commission rules directly regulate a licensee who also arranges financing on the same transaction, with no advance fee, a written contract and full cost disclosure.
What South Dakota requires
- Take no advance fee, use a written contract, and disclose all costs and the loan terms, as ARSD 20:69:08 requires.
- Hold an active South Dakota MLO license sponsored by a licensed mortgage company.
What the rule says
A real estate broker acting as a mortgage broker may not accept compensation in advance from a potential borrower for the procurement of a loan.
Before a real estate broker performs any services for a potential borrower, the broker and the borrower must enter into a written contract specifying the duties and conditions under which the broker is to perform services. The contract must fully disclose estimated compensations and expenses and must have a definite expiration date.
In all dealings between a borrower and a real estate broker, the broker shall fully and fairly inform the prospective borrower of all liabilities, costs, and other financial obligations that can or will be incurred by the borrower if the borrower uses the services of the broker.
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.