Is it acceptable to work for an FHA approved company and have a real estate license at the same time?

  It depends. (That sounds like an underwriter answer, doesn't it?) I get variations of this question all of the time, and there's a lot of misinformation out there that I'd like to clear up. I will start by quoting the HUD Handbook 4060.1 REV 2, Chapter 2-9G.

G. Full Time, Part Time and Outside Employment. A mortgagee may employ staff full time or part time (less than the normal 40 hour work week). They may have other employment including self-employment. However, such outside employment may not be in mortgage lending, real estate, or a related field.

Therefore, if an individual works for an FHA-approved lender, that person may not engage in the practice of real estate, but there is nothing prohibiting him/her from having a real estate license. Another example is an appraiser. It is acceptable to hold an appraisal license, for instance, yet not to engage in the practice of appraising while working for a company that is FHA approved.

The same hold true for any employment that is mortgage or real estate related. It is up to the lender to have controls in place to ensure that the employee is not actively engaged in any of these other activities. HUD does not require that the individual's license be put into an inactive state, but the lender may require it as a quality control feature.

That said, there is an exception. If an individual is employed for an FHA approved company yet not involved in FHA loan originations whatsoever - it is acceptable to participate in other real estate activity (i.e., real estate sales) as long as the FHA-approved company has procedures in place to ensure that the individual is not involved in the origination of FHA loans. At all!

Keep in mind that these are HUD requirements, and state laws vary about what is and is not acceptable.

I also want to clear something up. I hear all of the time that FHA "looks the other way" when individuals originate FHA loans and practice real estate at the same time, (as long as it's not on the same loan). This is absolutely NOT true. If you know it is happening with a specific company somewhere - they just haven't been caught. Yet.