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Can the real estate agent also be the loan officer?

Jim Quist Mar 20, 2024 4:36:33 PM
Can the real estate agent also be the loan officer?

You can simultaneously hold licenses as a real estate agent and a mortgage loan officer in Illinois.

Under certain conditions, you can also serve as the agent and the loan officer in the same transaction.

In this article, I'll highlight the rules for serving as the buyer's real estate agent and loan officer. Then, I'll show you how to use your dual role to make more money without spreading yourself too thin.


Can a real estate agent also be the loan officer for the same transaction in Illinois?

In Illinois, a real estate agent may also act as the loan officer for the same purchase transaction under certain conditions.

The Illinois Department of Financial and Professionals (IDFPR) regulates real estate brokers, agents, and mortgage lenders and brokers in Illinois.

The IDFPR website provides the following information: 

"There is no prohibition in either the Illinois Residential Mortgage License Act of 1987 or the Illinois Real Estate License Act of 2000 to simultaneously hold a mortgage loan originator license and a real estate salesperson license. The two professions are separate, and a properly licensed individual can perform services separately on any applicable Illinois conventional loan or real estate transaction. Federal statutory or regulatory limitations may exist..."

Source: IDFPR

Other states may have specific regulations or licensing requirements for individuals engaging in real estate and mortgage lending. So, if you're considering serving in dual roles, familiarize yourself with the laws and regulations of your state and check with the state licensing authority or legal counsel.


What are the requirements to be the real estate agent and loan officer for the same deal?

To act as a real estate agent and a loan officer in the same purchase transaction in Illinois, you must meet the following five requirements:

  1. Licensing: You must hold valid Illinois real estate and mortgage lending licenses.

  2. Disclosure: You must disclose your dual role to the buyer and relevant parties. The disclosure should include information about your licensing status, potential conflicts of interest, and any financial interests you may have in the transaction.

  3. Consent: You must obtain written permission from the buyer, acknowledging that you are acting in dual roles as their real estate agent and loan officer.

  4. Compliance: You must adhere to all relevant laws, regulations, and ethical standards governing Illinois real estate transactions and mortgage lending. 

  5. Fiduciary Duties: You must fulfill your fiduciary duties to your clients as a real estate agent and a loan officer, such as acting in their best interests, providing accurate information, and avoiding conflicts of interest that could compromise your ability to represent them fairly.

If you meet these conditions, you can be paid as a real estate agent and a loan officer for the same purchase transaction in Illinois.

Questions? Schedule a call with NewCastle Home Loans. 

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Is being a real estate agent and loan officer legal under federal law? 

Being a real estate agent and a loan officer on the same deal is legal under federal law. No federal laws prohibit an individual from holding both roles simultaneously in a real estate transaction.

The Real Estate Settlement Procedures Act (RESPA) and the regulations enforced by the Consumer Financial Protection Bureau (CFPB) do not explicitly prohibit a realtor from serving as the loan officer in the same transaction.

However, regulations and guidelines are in place to ensure transparency, fair dealing, and the avoidance of conflicts of interest in real estate and mortgage transactions.

  • RESPA prohibits kickbacks, referral fees, and other practices that could lead to conflicts of interest or harm consumers. It requires you to disclose your dual role to the consumers. Furthermore, compensation for both roles must be reasonable and commensurate with the services provided.

  • The CFPB has rules and regulations regarding unfair, deceptive, or abusive acts or practices in providing financial products and services. The agency may scrutinize compensation arrangements to ensure that they are fair and reasonable and do not create incentives for real estate agents to prioritize their financial interests over those of the consumer.


Be transparent and fair with homebuyers, and ensure your loan officer compensation is reasonable for the origination services you provide.


What mortgages can I offer when I'm the real estate agent and the loan officer? 

As a real estate agent and a licensed loan officer, you may offer the following mortgages to homebuyers as long as your lender allows it.

  • Conventional loans, including conforming loans sold to Fannie Mae and Freddie Mac, and non-conforming, such as jumbo loans
  • FHA loans: Properly licensed real estate agents can originate FHA loans.
  • VA loans for eligible veterans, active-duty service members, and certain spouses

However, a real estate agent acting as a loan officer cannot originate USDA loans. The U.S. Department of Agriculture backs USDA (Rural Development) loans to help low-to-moderate-income borrowers in rural areas purchase homes. According to the USDA's conflict of interest rule:

"Employees that impact the mortgage transaction (i.e., loan originators, processors, underwriters, appraisers, inspectors, etc.) are prohibited from having multiple roles or multiple sources of income, directly or indirectly, in a single Rural Development transaction."

Source: USDA

The types of mortgages available to you depend on your affiliated lender. Many object to employees acting as loan officers and real estate agents.  


Do you want to make more money, offer lower rates, and provide better customer service originating mortgages part-time? Contact NewCastle Home Loans, a Chicago-based mortgage lender.

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When the buyer uses an FHA loan, can the real estate agent be the loan officer?

A real estate agent can be the loan officer for the same transaction when the buyer uses an FHA loan. 

Previously, FHA prohibited the real estate agent and loan officer from dual roles. However, on December 15, 2022, FHA published Mortgagee Letter 2022-22, revising their conflict of interest and dual employment policy.

With this Mortgagee Letter,

"...individuals may have multiple compensated roles for services performed and permitted by HUD, provided that the transaction complies with all applicable federal, state, and local laws, rules, and requirements."

Source: FHA

Still, individuals directly impacting the mortgage approval decision, such as underwriters and appraisers, may have only one role in the transaction. 


What are the pros and cons of holding both roles: real estate agent and loan officer?

Holding both roles of a real estate agent and a loan officer in the same transaction can offer certain advantages but also come with potential drawbacks. 


Increase income

You can make more money by representing the buyer as the agent and the loan officer. As the agent, you get a commission on the property's purchase price. 

On top of that, you earn a commission by originating the mortgage. This dual role allows you to capture a larger share of the transaction's total revenue, resulting in increased earnings overall.

Additionally, you can refinance the buyer's mortgage when interest rates drop. Refinancing benefits the customer and allows you to pick up additional commissions.


Let's say your buyer's agent commission is 3% of the property's $350,000 sales price. You'll generate a $10,500 gross commission before paying your brokerage. And if your commission split is 60/40, you'll earn $6,300.

Suppose the buyer's mortgage was $332,500. In that case, your loan officer commission at 1% of the loan amount would be $3,325. Since you don't split commissions with the lender, you'll make $3,325 more on the same deal. 

$6,300 Buyer's agent commission
$3,325 Loan officer commission


Gain a competitive advantage

In a competitive real estate market, offering mortgages can help you stand out and attract more clients.

By providing a one-stop shop, you can be seen as a valuable resource by homebuyers, leading to repeat business and more referrals.


Lose time and focus

Many agents worry about spreading themselves too thin.

Serving as a real estate agent requires significant time and effort in prospecting, showing properties, negotiating deals, and handling paperwork.

Taking on additional responsibilities as a loan officer may reduce your ability to effectively serve your real estate clients.


Would you like to make more money on your deals without spreading yourself too thin? Schedule a call with me to discuss originating mortgages part-time with NewCastle Home Loans.

Book time to talk


How to choose your lender when you're an agent and a loan officer

Choosing a mortgage lender with low rates and an expert support team is essential for a real estate agent working a dual role as a part-time loan officer.


Competitive Rates

Low rates attract buyers. Providing lower rates than the competition improves your chances of winning deals as buyers are inclined to choose the more favorable and cost-effective loan option.

Ultimately, offering lower rates helps you close deals and make more money.



With help from the lender's staff, you can focus on your real estate agent responsibilities without overwhelming loan origination demands.

Your support team should handle mortgage pre-approvals, rate quotes, and all time-consuming administrative tasks.

With in-house processing and underwriting, you can deliver faster approvals, smoother transactions, and better customer service.


Dual-role agents must carefully consider the lender's interest rates and support level to avoid becoming overwhelmed.

NewCastle Home Loans is a local mortgage lender offering competitive interest rates and paying generous commissions.

Mortgage processing support and sales automation tools let you focus on selling real estate. In-house underwriting gives you faster approvals, smoother transactions, and better customer service.

Are you interested? 

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Jim Quist NewCastle Home Loans
President and Founder of NewCastle Home Loans. Jim has been in the mortgage business for 20+ years.

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