Procedural Update: New Private Lending Exemption Certificate (PLEC) Requirements


Beginning January 1, 2026, only the Illinois Department of Financial and Professional Regulation (IDFPR) can issue Private Lender Exemption Certificates (PLEC) for private lender mortgages for owner-occupied residential property. A PLEC must be attached to all private-lender residential mortgages recorded in Cook, Kane, Will, and Peoria Counties. A closer or title company cannot issue a PLEC.

Under the Residential Mortgage Licensing Act of 1987 (RMLA), a private lender is defined as "any person or entity that does not originate mortgage loans in the ordinary course of business, but makes or acquires residential mortgage loans with his or her own funds for his or her or its own investment without intent to make, acquire, or resell more than 3 residential mortgage loans in any one calendar year." 205 ILCS 635/1-4(d)(1.8).

Under the RMLA, a residential mortgage is defined as "any loan primarily for personal, family, or household use that is secured by a mortgage, deed of trust, or other equivalent consensual security interest on a dwelling as defined in Section 103(v) of the federal Truth in Lending Act, or residential real estate upon which is constructed or intended to be constructed a dwelling." 205 ILCS 635/1-4(f).

If the lender is not a private lender as per the definition above, or, if the property is commercial, investment, or non-owner-occupied property, the closer will issue the mortgage exemption certificate as they normally would.

However, if the lender is a private lender and the property is owner-occupied, then the closer or title company cannot issue a PLEC and that option is not available in the Illinois Anti-Predatory Lending Database. Only the IDFPR can issue the PLEC. The PLEC will be processed by the IDFPR under the PLEC program. Advocus closers and title companies must request PLECs for private mortgages by emailing the IDFPR at [email protected].

The mortgage must be reviewed to ensure that it contains the following information so the PLEC can be prepared by the IDFPR:

• The name of the mortgagor (borrower) and mortgagee (lender).
• The property address and PIN (property identification number).
• The loan amount.
• The borrower’s signature(s)
• The notary signature and stamp

The email must include the executed mortgage and must answer the following questions:

• Is the property owner-occupied residential property?
• Is the loan interest-bearing? If not, the promissory note must also be attached to the email in addition to the mortgage.
• Does the lender “originate mortgage loans in the regular course of business”?
• How many Illinois mortgage loans has the lender made during the current calendar year?

The IDFPR states that PLEC requests are generally provided within 3-5 business days.

The IDFPR has informed Advocus that they are keeping track of the number of mortgages that each private lender is issuing. Once the IDFPR determines that the private lender has issued more than 3 mortgages and is thus considered to be in the business of making loans, the IDFPR will email the requesting title company or closing agent to instruct them to issue an exempt certificate because the private lender is now considered to be an exempt entity. The IDFPR has informed Advocus that they will also contact the private lender and instruct them as well.

To meet the requirements of the IDFPR, the closing package procedure for closings conducted by Advocus involving private lender mortgages for owner-occupied residential property will change slightly.

1. Closers should email the IDFPR at [email protected] and copy [email protected] with the hope that the PLEC will be emailed both to the closer and the Recording Department once issued.
2. Once the closer receives the PLEC from the IDFPR, the closer must still forward it to the Recording Department.
3. Closers should continue to send closing packages to the Advocus Recording Department so that the deed, if applicable, can be recorded without delay.
4. The Recording Department will hold off on recording the mortgage until the PLEC is received from the IDFPR. If a power of attorney needs to be recorded before the mortgage, the power of attorney can be recorded without delay. Once the PLEC is received, the mortgage will then be recorded. 

Questions?

Please contact the Advocus Underwriting Department via email; we would be happy to assist you.