Understanding the complexities of private lending licensing regulations can be daunting, which is why the current Utah lending license requirements are under scrutiny for overly rigid conditions that pose a challenge for even the most seasoned lenders.
Currently, Utah requires a Mortgage Entity License and subsequently an individual Principal Lending Manager (PLM) license for any lender originating loans secured by One (1) to Four (4) residential properties. To qualify, the PLM must serve as a Lending Manager in the state and demonstrate at least three years of full-time mortgage loan origination experience and a minimum of 45 first lien residential mortgages.
This creates a problem for private lenders. Forty states in the U.S. do not require a license to make business purpose loans secured by SFR. For this reason, the prerequisites to qualify as a PLM become impossible to meet for private lenders who lend in states that do not require a license.
Even if they are from a licensing state like California, they still cannot meet Utah’s prerequisites, because business purpose loans are not reported to HUD and therefore not visible to Utah regulators. The only solution is to hire someone solely to meet the prerequisite obligations, leaving many qualified lenders excluded.
This means that even highly experienced lenders with decades of business-purpose lending history may be disqualified simply because their loans are not consumer loans reported to HUD, or they simply lack the requisite experience working for a consumer mortgage licensee because they have been focusing on business purpose lending their entire career.
As a result, the current regime favors large or incumbent consumer mortgage lenders and restricts competition in Utah’s private lending space.
At Fortra, we’ve seen many qualified private lenders shut out of Utah’s market simply because no one in their organization meets the PLM requirement. These rigid standards fail to recognize legitimate business-purpose lending experience, which is why our Corporate & Securities Team licensing subdivision is pushing for reforms that open the door to fair competition and real economic growth.
The Fortra Law on Utah Lending Licensing Requirements
The Fortra Law Corporate & Securities team supports common-sense reform to the Utah Principal Lending Manager requirements for business-purpose loans. Specifically, we propose allowing business-purpose lending experience to count toward the PLM licensing requirement, with safeguards in place to protect consumers.
A frequently asked question regarding our stance is, “Why not seek to eliminate the licensing requirements in Utah altogether?” While eliminating licensing requirements might seem ideal, it would be a more challenging process, as licensing regulations are codified in the statutes.
The Utah Residential Mortgage Regulatory Commission has discretion to adjust the experiential requirements regarding the Lending Manager threshold, and we at Fortra Law have found this hurdle to be insurmountable for many.
For these reasons, the logical choice for us at Fortra Law was to request an adjustment to the Lending Manager prerequisites.
The proposal outlines several solutions:
- Special Designation for Business-Purpose PLMs – A new license category (for example, “Commercial Lending Manager”) would allow qualified professionals to originate business-purpose loans exclusively, with a prohibition against consumer loans.
- Certification Requirement – Applicants would certify under penalty of perjury on NMLS that they engage solely in business-purpose lending. Any shift to consumer lending would constitute a violation enforceable by Utah penalties.
- Amended Experience Standards – Business-purpose lenders could demonstrate experience by providing evidence of 45 loans secured by first lien residential or commercial property, or 30 loans plus 30 months of private lending experience. Supporting documentation could include loan tapes, loan documents, or internal records.
To read the full proposal, click here.
This approach reduces unnecessary barriers for experienced private lenders while preserving borrower protections, encourages competition and innovation in Utah’s private lending market, and mirrors successful reforms previously achieved in Minnesota.
On October 1, 2025, Fortra Law Partner Jennifer Young, Esq., presented this proposal during the Utah Residential Mortgage Regulatory Commission meeting, addressing concerns such as potential impacts on housing affordability.
Our proposal emphasized that business-purpose loans strengthen Utah’s economy by financing projects that expand and improve housing supply, create jobs, and stimulate local businesses. Not inflate consumer housing demand, as otherwise suggested.
Template Letter for Private Lenders
Private lenders in Utah and neighboring states are encouraged to use the template below to submit their support in changing the Utah lending license requirements to the Utah Residential Mortgage Regulatory Commission. We recommend attaching the Fortra Law proposal, which sets out the specific reforms backed by Fortra. Including the proposal strengthens the request for a new business-purpose PLM designation, revised experience standards, and certification safeguards. Lenders can download the proposal to include with their submission:
Dear [Commissioner Name],
I am writing to support the proposed revisions to the Lending Manager experiential requirements for business-purpose loans in Utah, as outlined in the Fortra Law proposal. The Lending Manager requirements exclude many qualified private lenders because their entire careers have been in business-purpose loans. They would have zero experience working under a consumer mortgage licensee or have produced HUD-verifiable consumer mortgages. This should not exclude them from being licensed in Utah simply because they’ve concentrated on business-purpose loans their entire career.
I encourage the Commission to review the Fortra Law proposal, which recommends:
- Establishing a business-purpose Private Lending Manager (PLM) designation.
- Updating experience standards to recognize private lending expertise.
- Implementing certification safeguards to maintain accountability and borrower protections.
These reforms will promote fair competition, expand market access, and strengthen Utah’s private lending industry. I have attached the Fortra Law proposal for your consideration.
Sincerely,
[Your Name]
[Your Company]
[City, State]
Take Action
Private lenders who wish to support this rule-making change on Utah lending license requirements can submit letters directly to the Utah Residential Mortgage Regulatory Commission. By sharing your experience and perspective, you can help shape a regulatory framework that balances protections with practical access to licensing for private lenders.
For personalized guidance or assistance navigating Utah lending license requirements or other state licensing concerns, contact the Fortra Law Corporate and Securities team today. Our experts can help you understand the process and provide guidance every step of the way.
