Commercial Mortgage Broker in Texas: Licensing, Markets & Resources

Texas does not license commercial mortgage brokers. Finance Code Chapter 156, which governs residential mortgage loan companies, and Chapter 157, which governs mortgage bankers and residential mortgage loan originators, are both scoped to residential activity. Section 156.002(8-a) defines a "mortgage company" as a business that "engages in the business of residential mortgage loan origination on residential real estate located in this state" (Source: Texas Finance Code Chapter 156, statutes.capitol.texas.gov). A commercial-purpose loan on a Dallas office tower, a Houston industrial park, an Austin hotel, a San Antonio shopping center, or a 300-unit Fort Worth apartment property owned by a business entity does not fit that definition. In practice, that means a broker arranging those loans is not required to hold a Texas mortgage company or mortgage banker license. The analysis for any specific engagement belongs with the Texas Department of Savings and Mortgage Lending (TDSML) at sml.texas.gov before you accept it.

Texas Licensing Requirements for Commercial Mortgage Brokers

Three Texas agencies touch mortgage-adjacent activity: the Texas Department of Savings and Mortgage Lending (TDSML), the Office of Consumer Credit Commissioner (OCCC), and the Texas Real Estate Commission (TREC). None of them require a commercial mortgage broker license as such. Here is what each one actually covers and where the lines are.

TDSML and Finance Code Chapters 156 and 157

TDSML administers mortgage licensing in Texas. Chapter 156 licenses mortgage companies (what most states would call mortgage brokers). Chapter 157 registers mortgage bankers and licenses residential mortgage loan originators (RMLOs). Both chapters use definitions that depend on "residential mortgage loan origination" and "residential real estate" (Source: Texas Finance Code Chapters 156 and 157, statutes.capitol.texas.gov). The authorized activities list TDSML publishes for Chapter 156 mortgage companies and Chapter 157 mortgage bankers is residential: first and second mortgage brokering and lending on residential real estate, home equity, reverse mortgages, and residential loan processing and underwriting. Commercial mortgage brokering on non-residential real estate, or on five-or-more-unit multifamily owned by a business entity, is not on that list and is not inside the chapters' scope.

If any residential element enters your engagement, TDSML licensing attaches. The headline numbers for the residential side are a $275 Chapter 156 company license fee, a sponsored qualifying individual with an active Texas RMLO license, no state surety bond requirement for Chapter 156 companies, and 23 total hours of pre-licensing education for the RMLO (20 federal hours plus 3 Texas-specific hours) with the SAFE MLO national test required (Source: Texas Department of Savings and Mortgage Lending licensing checklists, sml.texas.gov, and NMLS Texas state checklists at nationwidelicensingsystem.org). Those are residential-side numbers. They are listed here because people assume they apply to commercial, and they do not.

TREC and the Real Estate License Act

The Texas Real Estate Commission licenses real estate brokers and sales agents under Occupations Code Chapter 1101, the Real Estate License Act (Source: Texas Occupations Code Chapter 1101, statutes.capitol.texas.gov). TREC licensing is triggered by acting for compensation on behalf of another to sell, lease, or negotiate the sale or lease of real estate. A pure debt placement engagement, where you shop a commercial mortgage loan and collect a mortgage brokerage fee, does not fit that definition. If your engagement includes finding a buyer, representing a party in a sale or lease, or acting as an intermediary on a transaction, that is TREC-regulated and requires a Texas Broker License. Many commercial mortgage firms in Texas carry a TREC Broker License to cover adjacent activity. The license question follows the specific service provided, not the title on your business card.

OCCC and Consumer Credit

The Office of Consumer Credit Commissioner at occc.texas.gov regulates non-depository consumer lenders, including regulated lenders making consumer loans at rates above 10% under Finance Code Chapter 342, pawnshops, motor vehicle sales finance, and certain property tax lenders (Source: Texas Office of Consumer Credit Commissioner, occc.texas.gov). OCCC also licenses mortgage loan originators sponsored by regulated consumer lenders through NMLS, which is still a residential framework. Commercial mortgage brokering sits outside OCCC's jurisdiction.

Business Items That Are Not Licensing Items

Operating a commercial mortgage brokerage in Texas requires standard business formation with the Texas Secretary of State, a franchise tax account with the Texas Comptroller, a written fee agreement signed before you shop a deal (because enforceability of brokerage fees in Texas depends on it), errors and omissions insurance appropriate to deal size, and compliance with federal law including the SAFE Act for any residential-touching activity and anti-money-laundering obligations where applicable. For the broader multistate licensing picture, see the guide to commercial mortgage broker licensing by state and the deeper licensing and regulatory requirements for CRE mortgage brokers.

Texas's Major Commercial Real Estate Markets

Texas is one of the largest, deepest, and most liquid CRE markets in the United States. Statewide population reached 31.3 million in the Vintage 2024 Census estimates and the state led the nation in numeric population growth with 562,941 new residents between 2023 and 2024 (Source: U.S. Census Bureau, Vintage 2024 Population Estimates, census.gov). That growth drives demand across every property type and keeps the lender bench deep.

For deeper looks at the largest metros, see the Dallas-Fort Worth commercial real estate page, the Houston commercial real estate page, the Austin commercial real estate page, the San Antonio commercial real estate page, and the Fort Worth commercial real estate page.

The Texas Lending Landscape

Texas has one of the deepest and most competitive commercial mortgage lender benches in the country. Every major capital source quotes Texas as a Tier 1 market, and most national lenders maintain Texas-based production offices in Dallas, Houston, or both.

Fannie Mae and Freddie Mac quote agency multifamily aggressively across all five major Texas metros and in most secondary markets. Agency DUS lenders and Optigo sellers all treat Texas as a core market. For small-balance multifamily, Fannie Mae Small Balance and Freddie Small Balance Loan (SBL) both see heavy Texas volume. See the broker guide to multifamily finance, the program overviews for Fannie Mae multifamily and Freddie Mac Optigo, and the Fannie Mae Small Balance Loan guide. The glossary entries on Fannie Mae multifamily and Freddie Mac multifamily cover the structural pieces.

HUD is active statewide through HUD 223(f) and 221(d)(4). The long amortization, fixed-rate, non-recourse execution works well on Texas workforce multifamily and senior housing where sponsors accept the HUD timeline. See the glossary entries for HUD 223(f) and HUD 221(d)(4) for program mechanics.

CMBS treats Texas as a core market. Conduit shops compete on Texas office (with sponsor scrutiny post-2020), retail, industrial, hospitality, and multifamily, with loan sizes typically starting at $2 million to $5 million and running to institutional size. See the broker guide to CMBS loans and the CMBS glossary entry, plus the related glossary entries for conduit loan, defeasance, yield maintenance, master servicer, and special servicer.

Life insurance companies compete hard on institutional-quality Texas product. Texas industrial, multifamily, and credit-tenant retail routinely attract life company quotes. Fixed-rate, long-duration, low-leverage execution is the typical structure. See the life company loans guide and the non-recourse loan glossary entry for the covenant package.

Regional and national banks maintain significant Texas CRE exposure. In-state banks like Frost Bank (San Antonio) and Prosperity Bank (Houston), national banks with major Texas footprints (JPMorgan Chase, Bank of America, Wells Fargo, Truist, Comerica), and regional lenders compete across every property type and deal size. Bank execution typically features recourse or partial recourse (see recourse loan and carve-outs), shorter terms than agency or life company, and faster closings.

SBA volume is substantial in Texas. The SBA 504 and SBA 7(a) programs both see heavy use on owner-occupied hotels, medical offices, self-storage, retail, and manufacturing. Texas consistently ranks in the top three states for SBA 504 and 7(a) loan volume (Source: U.S. Small Business Administration, 7(a) and 504 Summary Reports, sba.gov). See the SBA loans guide for the owner-occupancy and sizing thresholds.

Bridge and debt fund lenders quote Texas value-add and transitional deals at scale. Houston multifamily value-add, DFW industrial reposition, Austin office-to-residential conversion, and San Antonio workforce multifamily are all common bridge deal types. See the bridge loans guide, the bridge-to-perm financing guide, the bridge loan for multifamily value-add guide, and the glossary entry on bridge loan and hard money loan. Mezzanine and preferred equity structures (see mezzanine financing and preferred equity) appear regularly on larger Texas transactions.

Construction lending in Texas remains active, especially for multifamily, industrial, and build-to-rent. See the construction loan glossary entry and the loan-to-cost entry for the structural pieces that come up on every ground-up deal.

Texas-Specific Underwriting Factors

Property Tax

Texas does not have a state income tax, and the state funds schools and local government heavily through ad valorem property tax. Effective commercial property tax rates in Texas run well above the national average, with combined rates in major metros often ranging from roughly 2.0% to 2.9% of assessed value depending on county, city, school district, and special district overlays (Source: Texas Comptroller of Public Accounts, Property Tax Division annual reports, comptroller.texas.gov). On acquisition, reassessment to the sale price is a near-certainty, so underwriting the "going-in" property tax at the stabilized assessed value is standard practice. Protest the assessment every year; most Texas sponsors retain a property tax consultant on contingency. Underestimating property tax is the single most common underwriting error on first-time Texas deals.

Insurance (Windstorm, Hail, Named Storm)

Texas insurance pricing has moved materially over the past five years. Gulf Coast counties (Harris, Galveston, Brazoria, Nueces, Jefferson, Chambers, and the Rio Grande Valley) carry named-storm and windstorm exposure that drives premiums and deductibles higher; the Texas Windstorm Insurance Association (TWIA) at twia.org serves as the insurer of last resort for designated coastal counties (Source: Texas Windstorm Insurance Association, twia.org). North Texas (DFW) carries significant hail exposure that has reset hail deductibles across the metroplex. Lenders size insurance line items carefully and require named-storm coverage where applicable. Pre-size insurance using recent quotes, not stale operating statements.

No State Income Tax, High Franchise Tax

Texas has no state individual income tax under Texas Constitution Article VIII, Section 24 (Source: Texas Constitution, statutes.capitol.texas.gov). The state does impose a franchise tax (margin tax) on business entities above certain revenue thresholds, administered by the Comptroller. For most CRE sponsors, the franchise tax is a modest line item compared to property tax, but it belongs in the underwriting model.

Deed of Trust State, Non-Judicial Foreclosure

Texas is a deed of trust state with non-judicial foreclosure, meaning a lender can foreclose on commercial real estate relatively quickly (typically within 60 to 90 days of default notice) through a trustee's sale under Texas Property Code Section 51.002 (Source: Texas Property Code Chapter 51, statutes.capitol.texas.gov). That is favorable to lenders and compresses pricing on bank and debt fund execution versus judicial foreclosure states. Deficiency judgments are generally available in Texas on commercial loans unless specifically waived.

Energy Market Exposure (Houston, Permian, Corpus Christi)

Houston, Midland-Odessa, and Corpus Christi carry direct exposure to oil and gas prices. Office tenancy in Houston's Energy Corridor and Galleria submarkets, workforce multifamily in the Permian Basin, and industrial around the Port of Houston all move with the oil cycle. Lenders stress-test energy-exposed Texas deals against oil price scenarios, and sponsors with experience through multiple cycles get better execution.

Population Growth and In-Migration

Texas gained 562,941 residents between 2023 and 2024, the largest numeric population gain of any state (Source: U.S. Census Bureau, Vintage 2024 Population Estimates, census.gov). That growth supports multifamily absorption, retail demand, industrial logistics expansion, and housing construction. The underwriting benefit is real: Texas is one of the few states where lenders will give credit to projected rent growth in Year 1 and Year 2 underwriting on well-located multifamily.

Entity Structure, Single-Purpose Entities, and Non-Recourse Carve-Outs

Agency, CMBS, life company, and most debt fund lenders on Texas deals require a single-purpose, bankruptcy-remote borrower entity. See the special purpose entity glossary entry and the carve-outs entry for the standard non-recourse carve-out package (bad-boy guarantees for fraud, waste, misapplication of funds, environmental, and bankruptcy filings).

Metrics Lenders Size To

Texas deals size on the same metrics as the rest of the country. DSCR, or debt service coverage ratio, drives bank and agency sizing with typical minimums in the 1.20x to 1.30x range depending on lender, property type, and structure. Cap rate supports the valuation side; Texas cap rates on institutional multifamily and industrial have historically priced tighter than national averages reflecting the growth story, though 2024 and 2025 rate volatility compressed spreads. Debt yield shows up as a hard minimum on CMBS deals, typically 8% to 10% depending on asset type. Loan-to-value, loan-to-cost, cash-on-cash return, and NOI are the other core sizing inputs. Amortization, interest-only periods, balloon payment dates, basis points over the index, prepayment penalty structure (step-down, yield maintenance, or defeasance), and term sheet contingencies are the structural items brokers negotiate.

Typical Financing Sources by Texas Deal Type

For property-type specifics, see the broker guide to asset types.

How Janover Pro Helps Brokers Working Texas Deals

Janover Pro gives commercial mortgage brokers a lender search tool built for a market where the right lender might be a Houston-headquartered regional bank, a Dallas life company production office, a New York CMBS desk quoting Texas industrial, an agency DUS lender covering the whole state, a national SBA shop with Texas BDOs, or a debt fund that only quotes Texas value-add multifamily. Filter by property type, loan size, execution, and geography to build a real call list instead of guessing, then pre-size the deal before you pick up the phone. See the CMBS, Fannie Mae multifamily, Freddie Mac multifamily, SBA 504, and SBA 7(a) glossary entries for the executions that come up most on Texas commercial deals.

Frequently Asked Questions